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