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GREDA’s Legislative Initiative Set to Change the Taxation System for the Renewable Power Plants

One of the discussions held during the recent Renewable Energy Investment Conference hosted by the USAID Securing Georgia’s Energy Future Program in Tbilisi, Georgia was a legislative initiative authored by the Georgian Renewable Energy Development Association – GREDA. The initiative that has been conceived several years ago by the Association and drafted in early 2022. The document has already been endorsed by the developers and the investors, as well as by the Georgian Energy Development Fund and the Ministry of Economy and Sustainable Development of Georgia. While the consultations with the Government and the Parliament of Georgia are ongoing, GREDA was confident enough to present the existing version of the future law to a wide audience.

The draft law regulates the distribution of the property tax money, paid by the renewable power plant operators. On average, the property tax paid annually by a single small-sized hydropower plant amounts up to 200,000 USD. While the existing Tax Code of Georgia does state the property tax needs to be allocated to the municipal budget, it does not specify whether any of that money should end up in the specific communities affected by specific renewable power plant projects. GREDA’s legislative initiative is created to make a substantial change in the legislation, hence offering tangible benefits to the communities and the local self-governments across the country. Moreover, once it comes into effect, the law will offer a more predictable and stable environment to investors. Finally, the legislative initiative is promoting regional development and decentralization by providing access to additional funding in the mountainous areas.

"We have been working on the initiative for several months. It is largely based on a study done by the Norwegian Directorate of Water Resources and Energy (NVE), which suggests that one of the most successful mechanisms for stakeholder engagement at the pre- construction and construction stages of renewable power plant projects is fair benefit- sharing, specifically regulating the property tax distribution in the project affected areas. We at GREDA are humbled and honored to be able to author this legislative initiative and make sure it takes shape," – stated GREDA Supervisory Board Chairman Giorgi Abramishvili during his presentation at the Renewable Energy Investment Conference.


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