COST-BENEFIT ANALYSIS FOR HYDROPOWER PROJECTS FOR USAID/HPEP.(2014)

USAID funded Hydropower and Energy Planning Project (HPEP) commissioned TBSC for Cost-Benefit Analysis (CBA) model development for Enguri watershed area with the inclusion of environmental and social impacts. A working group of five NGOs (CENN, Green Alternative, Green Movement of Georgia, Energy Efficiency Center and REC Caucasus) was responsible for providing the data. To the best of our knowledge, such an analysis has never been done in hydropower in Georgia. Based on the TEEB (The Economics of Ecosystems and Biodiversity) methodology, the Working Group came up with a prioritized list of 13 Thematic Areas of social and environmental costs. A framework model was developed that monetized the following Thematic Areas: Resettlement, Economic Development, Raw Materials And Foods, Moderation Of Extreme Events, Habitats For Species and Tourism. For simplification purposes, the only benefit considered was electricity. The model was applied to three hydropower projects: one with a reservoir – Pari (180 MW) and two run-of-river: Enguri 6 (6.5 MW) and Mulkhura (29.4 MW). According to the Thematic Areas mentioned above, we calculated the Benefit-Cost Ratios for these projects. The WG and TBSC received periodic feedback from HPEP, USAID and three ministries: the Ministry of Environment, Ministry of Energy and Ministry of Economy.

Nino Kipshidze
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