GRPO Green Bond

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The project consists of IFC subscription up to US$ 24 million in a secured green bond issued by Georgian Renewable Power Operations JSC (“GRPO”, the “Issuer”), which owns and operates 71 MW of renewable energy (RE) generation facilities in Georgia. GPRO is a fully owned subsidiary of Georgia Capital (“GCAP”, the “Company”). In December 2021 GCAP has agreed to sell an initial 80% of its equity interest in the water utility business to FCC Aqualia, while GCAP has retained sole (100%) shareholding in the renewable energy business. The demerger of the renewable energy business from GGU is scheduled to occur in September 2022 and after the transaction, GCAP will indirectly own 100% of GRPO’s renewable energy assets. Operation of electricity distribution grids is out of the Issuer’s responsibility. No new acquisitions/developments are expected to be financed under this project. GRPO operates 1 wind farm (20.7 MW) and 4 run-of-the-river hydro-power plants (“HPPs”) with the total installed capacity of 50.4 MW, all constructed during the period of 2014-2019. Mestiachala 2 HPP with capacity of 30.0 MW was built and commissioned by GCAP in consortium with RP Global in 2019, while the other facilities were acquired by the Company at the operational stage from different owners/developers in 2019, including Qartli wind farm (20.7 MW) and three HPPs with the total capacity of 20.4 MW - Debeda (3.2 MW), Kasleti (8.1 MW), and Akhmeta (9.1 MW). Portfolio overview:Qartli wind farm is comprised of six Vestas 3.45 MW turbines with a total technical capacity of 20.7 MW. The wind farm is located in the central part of Georgia approximately 5.5 km northwest from the city of Gori and 2 km from the nearest residential area. Hydro power plants: Kasleti 2 HPP (8.1 MW) was commissioned in 2018. The HPP is built on the Kasleti River between the villages Zeda Tsvirmindi and Kveda Tsvirmindi (the nearest residences are 180-200 meters (m) away). Kasleti HPP includes a weir (15 m long and 2.3 m wide); two settling basins for de-sanding and flow balancing; and an underground penstock with the length of 2,130 m that leads the water to the powerhouse. Used water is discharged back into Kasleti River. Akhmeta (9.1 MW) and Debeda (3.2 MW) HPPs were commissioned in 2014 and 2016, respectively, and both are located on irrigation channels and operate only around 8 months per year during non-irrigation seasons (September -May).  Akhmeta HPP is built south-east of the city of Akhmeta, about 4.5-6.0 km from the city center, on the right bank of the Alazani River. Debeda HPP is located on agricultural land in the southern part of Marneuli Municipality, near the Georgian-Armenian border, between the villages of Damia-Giaurarkh and Mamai.  Mestiachala HPP project was initially designed and constructed with a cascade of 2 HPPs. In 2019, Mestiachala 1 HPP was significantly damaged by a rock avalanche due to heavy rainfall and floods and its rehabilitation was found unfeasible. Mestiachala 2 HPP was put back into operation in December 2019 after rehabilitation. Mestiachala 2 HPP (30 MW) consists of two intakes at the confluence of two rivers and a concrete reservoir of 10,000 m3 (for de-sanding and flow balancing), a 7,200 m long buried penstock, a powerhouse with three Pelton turbines and a short tailrace leading the water back to the river. Mestiachala 2 HPP is adjacent to an airport and the town of Mestia. Several residential houses are located in the vicinity of the HPP on the opposite riverbank.