GEORGIA: IRANIAN INVESTMENT IN HYDROPOWER

C O N F I D E N T I A L TBILISI 001738 SIPDIS E.O. 12958: DECL: 09/18/2019 TAGS: PREL ETRD ENRG IR GG SUBJECT: GEORGIA: IRANIAN INVESTMENT IN HYDROPOWER REF: SECSTATE 70201 Classified By: CHARGE D'AFFAIRES A.I. KENT LOGSDON FOR REASONS 1.4 (b) AND (d). ¶1. (U) This is a guidance request. Please see paragraph 4. ¶2. (C) Charge was called in September 9 by Georgian Deputy Foreign Minister Alexander Nalbandov with a response to the points contained reftel. The initial points, which cautioned Georgia about the negative consequences of accepting Iranian investment in Georgia's hydropower sector, were delivered by the Ambassador to the Prime Minister, Minister of Energy, and Foreign Minister on July 8. ¶3. (C) DFM Nalbandov thanked the Charge for the points and said that the Georgians had taken our concerns into account. As a result, the Georgians had asked the Iran Export Bank to withdraw from the deal. Now the local company developing this deal - the Georgian Investment Group -- has now approached the Georgian Government with a different financing package. Reportedly, a private Iranian private company "Sunir" would provide the financing for the project and the excess summer power would now be sold to Turkey. Of course, this power could always be fungible in terms of ultimate destination, but post has no reason to doubt the MFA's information. According to DFM Nalbandov, Sunir was a private company involved in commercial projects around the world and therefore, he thought that this new financing package would meet USG concerns. The Charge cautioned that he would have to refer these new details back to the Department for our official view. ¶4. (C) Action Request. Post would appreciate the Department's guidance on how to respond to the new financing arrangement proposed for this potential new investment in Georgia's hydropower sector. LOGSDON