Electricity Sector Reform Action Plan

The Program will have a significant impact on energy market reform efforts of the Government of Georgia (GoG) to comply with the country's obligations under the Energy Community Treaty (EnCT). The investment objective will be achieved through the provision of technical assistance to various stakeholders in the energy sector. The ultimate goal of this Program is to enhance Georgia's energy security through an improved legal and regulatory framework and increased investments in the energy sector. The ultimate expected outcome of this project is an energy legal and regulatory framework that complies with European requirements and encourages competitive energy trade and private sector investments. The GoG signed the EnCT in October 2016, committing to harmonize its energy-related legislation to specific European Union (EU) directives and other EU regulations. USAID Energy Program supports the GoG in developing legislation that is compliant with EU legislation. The Program was asked by the Ministry of Economy and Sustainable Development of Georgia (MoESD) to support the development of the Electricity Market Concept Design, which provides a high-level description of the final market design with specific stages of development to transition from the existing Electricity market to a fully competitive and robust electricity market by 2020. To complement the Concept Design, USAID Energy Program has developed the initial Electricity Sector Action Plan. The Action Plan provides detailed activities to be accomplished during electricity market transition in order for the market to reach full competition. The initial Action Plan will be shared with counterparts and other stakeholders, including international donor organizations, to establish responsibilities of the various parties to support all the activities. The Action Plan will be updated over the life of the Program and the status of the activities will be tracked and then recorded in the Action Plan as a way to monitor progress of the activities. The Electricity Market Reform Oversight Working Group (WG) was established in 2018 to oversee the electricity market reform process. The WG is responsible for developing and adopting the objectives and scope of work for the Electricity Market Development WG. The Electricity Market Transitional Plan for reforms and restructuring was also developed in 2018, outlining the detailed and adopted plan for reforms and restructuring. The State Energy Policy Act was drafted in 2018, providing strategies and priorities in the electricity and natural gas sectors, as well as other measures and guidelines to be required by the Law of Georgia on Energy (LoE). The National Energy Strategy was updated in 2018, in line with the approved Electricity Market Transitional Plan. The Electricity Market Concept Design was adopted in 2018, providing strategic guidance and targets for the design of the electricity market reform, balancing market reform, and principles for the promotion of a functioning electricity market. The draft Electricity Market and Balancing Rules were developed in 2018, comprising two sets of regulatory acts that are compliant with EU and Energy Community (EC) acquis. The adoption of renewable energy strategic framework and package was also initiated in 2018, establishing the strategic, institutional, and financial vision and framework for renewable energy in Georgia.