Well-Connected Private Investor Scoops Up Hydropower Rights in Georgia

Georgia’s government has signed secretive agreements with a well-connected private investor to develop controversial hydroelectric power plants in Georgia, which local villagers fear will destroy their rivers.

OCCRP and its Georgia-based partner Studio Monitori discovered that a businessman named Koka Kokolashvili owns the two companies that have received the permissions, despite having no track record in the renewable energy business.

Kokolashvili is not a high-profile public figure in Georgia, although he was previously the financial director of the state-run oil and gas company, a position he was appointed to in his 20s.  

He does, however, have powerful family connections: his sister is married to a cousin and close confidant of Georgia’s most influential figure and informal leader, Bidzina Ivanishvili. 

Reporters discovered that the government had given two of Kokolashvili’s companies the exclusive right to develop at least 25 hydroelectric power plants, known as HPPs, of varying capacities in both east and west Georgia. The agreements give a green light to start the preparation process ahead of construction, which has to be approved by the government separately at a later stage. 

As with many of the country’s HPPs, the government has guaranteed that it will buy electricity produced by some of the plants at a set price for 15 years after they launch.

Details about the deals are scarce because the government has not made all of the contracts public, despite legal requirements to do so. There is also no information about how or why the companies were chosen to build the plants. 

But through corporate registry filings, reporters did discover that the two companies commissioned to develop the plants were set up by other people, and handed to Kokolashvili for free by their founders months before the contracts were signed.

It is not clear how much these companies will invest in the plants, but they are a potentially lucrative asset as Georgia aims to cash in on its renewable energy capacity. 

When asked by Studio Monitori and OCCRP how he obtained the rights, Kokolashvili said that his family connections played no part. The permits “were obtained in full compliance with the laws and accompanying regulations of Georgia,” he said in a statement sent to reporters on his behalf by a business associate. 

He added that the projects are currently undergoing feasibility studies and that the agreements with the government were for hydropower station studies, not construction rights.

“All the HPPs presented are in the project stage, meaning that capital and other cost planning for the hydropower plants is underway. Therefore, the investment amount will become known after the project completion. I confirm that once the investment volumes are determined, we will seek financing from commercial banks as well as various investment institutions and funds both in Georgia and abroad,” Kokalashvili said.

When asked if he had any other hydropower plants in the pipeline in addition to the 25, he said there were “several” more in the “project development stage.” The director of one of his companies provided more detail on this, telling journalists there were an additional four, for a total of 29 HPPs.

A spokesperson for Ivanishvili said that he did not know Kokolashvili and was not familiar with the HPPs he was developing.

With its rich network of rivers, most of the country’s domestic electricity supply comes from hydropower, and the European Union sees it as a potential electricity supplier to Europe. Georgia already has more than 90 hydroelectric power plants, some of which date back to the Soviet era.

But the government’s attempts to expand the network have triggered protests over environmental and safety concerns in recent years.

And while officials in Georgia and the EU tout the country as an untapped power resource, critics say the lack of public information around the HPP deals investigated by Studio Monitori and OCCRP raises questions over how the renewable energy sector is being run, and who is benefiting. 

“We don’t know how this person [Koka Kokolashvili] won the rights to them or why he is the one building them — nobody knows. It's all kept hidden,” said Dato Chipashvili, executive director of Georgian watchdog Green Alternative, which focuses on environmental issues and social justice.

“Is the decision-making process in Georgia’s energy sector open? No, it is not open, and it has become even more closed,” he added.

Villagers who spoke with Studio Monitori questioned how the HPPs would help their communities. Some feared the projects would drain water away from their rivers, affecting their lives and businesses. 

“Our village should benefit from this project, otherwise, what is the point? The river is the wealth of our village,” said Mamuka Karkashadze, who lives in Etseri in western Georgia, where an HPP awarded to Kokolashvili is planned.

A New Wave of Hydropower Deals

Information about the HPP contracts awarded to Kokolashvili’s companies is particularly hard to find because many of the agreements were made during a hiatus in full government declarations around public-private contracts in Georgia.

Even though the government is legally obliged to publish decrees with full details of the contracts it signs with private investors, in September 2020 it stopped doing so and made only brief announcements of these deals. The government gave no explanation for the absence of contract information, but it coincided with the Covid-19 pandemic, when questions were being raised by Georgian media about health-related deals being between the authorities and private companies. 

Failure to publish government contracts significantly increases the risk of corruption and opacity, said Goga Tushurashvili, head of research at the Institute for Development of Freedom of Information, a Georgia-based NGO.

“A government decree is one of the most important legal documents through which citizens can understand what decisions the government is making in general. Additionally, a significant part of these decrees covers how state property and state funds are managed,” he said.  

“All branches were involved in the concealment of these documents. Not only was the government hiding them, but the judiciary as well.”

The government reinstated full contract declarations in February 2024 when a new prime minister took office promising to commit to transparency, but has refused to retrospectively provide details about agreements made during the three-year gap. 

Reporters from Studio Monitori wanted to find out more about the deals made between 2020 and 2024, so they decided to comb through the brief announcements that were made during that time. Although the details were limited to the name of the contracted company and the name of the project involved, reporters spotted a pattern: a flurry of HPP construction agreements with two firms.

Between April and October 2023, agreements were signed for the development of five plants in western Georgia by Imer Energy Capital and 10 in eastern Georgia by NC Group 2022. Although the owner of these companies wasn’t revealed in the announcements, Georgia’s corporate registry showed that both were owned by Koka Kokolashvili.

The exact location of each plant was not published, but the names of the HPPs correspond to municipalities in Georgia, suggesting roughly where the plants are due to be built. 

Despite multiple attempts by reporters to obtain copies of the contracts announced by the government, neither the Ministry of Economy nor the Government of Georgia responded. 

There are also question marks about when and how contracts for a further 10 HPPs were awarded to Kokolashvili’s companies, bringing the total number of HPPs he has permission to build to 25. 

Documents from a state auction to supply electricity to the government in June 2024 show that Imer Energy Capital already had eight more HPP agreements by that time, which had not been publicly announced by the government. A June 2024 scoping document from one of the company’s projects revealed another two.

The contracts for these extra 10 HPPs were only later announced by the government, in September and November 2024. 

Museliani told reporters that Kokolashvili’s companies had been given contracts to develop another four HPPs in western Georgia. Reporters could find no record of these in official government announcements. 

The government did not respond to questions on this. 

In June 2024, Imer Energy Capital was among a number of companies contracted at a state auction to supply electricity to the government for 15 years once their HPPs are operational. (It is common practice for the government to award such guarantees to HPPs in Georgia, which are not usually designed to supply electricity to the local area, but to pump power into the national network.) 

Companies Gifted to Kokolashvili

Ownership records show that Kokolashvili was given sole ownership of Imer Energy Capital and NC Group on the same date in January 2023. Both companies had been established by different founders in October 2022, again on the same date.

Imer Energy Capital was set up by an entrepreneur named Gocha Museliani, while NC Group was founded by Davit Kaikatsishvili, who is currently the head of the government’s Department of Internally Displaced Persons and Eco-Migrants Policy and has held roles in that department for the past 10 years. Museliani was director of both companies and remains in that role.

As a government official, Kaikatsishvili was legally required to disclose the establishment of NC Group, but did not mention it in his financial declarations for that year. In a response to reporters’ questions, he said that he was not involved in the company at the time the declarations were made. 

“At the time of filling out the declaration, I did not even think about the already transferred company, which had not conducted any entrepreneurial activity during my ownership, nor had it generated any income for me. This is the sole reason why this information was not reflected in the declaration,” Kaikatsishvili said.

“Additionally, I inform you that after receiving your letter, I provided this information to the Anti-Corruption Bureau and am awaiting their response.” 

Transfer documents state that both men gave their companies to Kokolashvili for free, raising questions over the circumstances and reasons for such a gift.  

Kaikatsishvili told reporters that NC Group did not own any assets at that time and that he had transferred the company to Kokolashvili on the request of Museliani, whom he described as his friend. Museliani said Imer Energy Capital was also “non-functional” at the time of transfer.

Kololashvili said: “When we decided to start this activity, it turned out that Gocha Museliani already had two registered companies that were not operational. Accordingly, instead of registering new companies, we started working with the existing ones. These companies had not started operations yet, so the transfer of shares was done free of charge.” 

Kokolashvili has not appeared at public meetings with villagers who will be impacted by the new HPPs, despite owning the companies that won contracts to build them.

Villagers in western Georgia said it was Museliani who was at the meetings and had described himself as the “private investor” behind the project. Kokolashvili’s name was not mentioned, according to residents. 

Museliani and Kokolshvili both told reporters from Studio Monitori and OCCRP they had known each other for many years, without giving further detail.  

Kaikatishvili said that he had only met Kokolashvili once, when he transferred ownership of NC Group to him. Kokolashvili said he had no relationship with Kaikatishvili. However, Kaikatishvili’s LinkedIn profile shows that during parliamentary elections in 2012, when Georgian Dream was running for the first time, he was a member of a coalition party campaigning for them on a regional level. 

In 2014, when Kokolashvili became financial director of the state-run oil and gas corporation, Kaikatishvili was appointed head of the registration division of the Department of Internally Displaced Persons and Eco-Migrant Policy. Like Kokolashvili, he was in his 20s at the time.

Villagers Fear For the Future of Their Rivers

The documents from the state auction where the government guaranteed to buy Imer Energy Capital’s electricity show the capacity of the new plants the company has contracts for. They range from individual plants with a capacity of 1.83 MW to a cascade of linked plants with a total capacity of 15.89 MW — all relatively small in terms of HPPs. (No information has been revealed so far about the size of NC Group’s plants.) 

But even small hydropower plants have raised concerns internationally about negative impacts. 

For example, research in Romania from 2021 concluded that they can severely threaten aquatic biodiversity, and researchers in eastern China recently published findings on how small hydropower plants significantly altered river habitats.

HPPs work by harnessing the flow of water and directing it through a pipe to a turbine. The water spins the blades of the turbine, which is connected to a generator that produces electricity. Some use water released from dammed reservoirs, while others channel a portion of the river into a separate channel. 

In the cases in which details of Kokolashvili’s companies’ projects have been made public, the HPPs do not involve building new dams, but propose to utilize an existing reservoir, or channel part of the river away. 

Nino Chkhobadze, chairwoman of the Greens Movement of Georgia, said that there had been little research into the impact of small hydro plants in Georgia, but that villagers feared the potential impact on their local environment and drinking water supply. 

“The main problem with small hydropower plants is that there are too many of them,” she said, adding that some villagers had told her in the past that HPPs had drained their riverwater. She questioned their functionality, saying that often they were only operational for a few months of the year. “There are a lot of small hydropower plants that can’t even fulfill their purpose of generating electricity,” she argued. 

Some details about the projects planned by Kokolashvili’s companies have emerged in the “scoping reports” that private companies have to submit to the government, laying out the potential environmental impact of the plants. 

Imer Energy Capital has submitted two such reports. They reveal that a project in the western region around the village of Dzevri involves a cascade of five small HPPs that will divert part of the river. Another project in the village of Boslevi, also in western Georgia,  comprises four small HPPs which are each under 2 MW in capacity but together are set to produce an average of 12.64 GWh per year and will be fed by water from an existing reservoir. 

The scoping reports for both projects acknowledge multiple potential negative effects, such as impact on animal habitats and harmful emissions from construction. But the reports say the downsides are outweighed by the benefits to the “country’s energy system.”

In some of the villages covered by the scoping reports, public meetings have been fraught, including one in Dzevri where the audience walked out. 

Giorgi Chapidze, who is 75, staged his own one-man protest at a public meeting with government officials and Museliani in neighboring Chkhari Etseri, where he lives. 

“During the meeting, I asked people out loud: ‘Raise your hand if you are against the HPPs.’ Everyone raised their hands. Then I turned to the investor and told him: "See, it’s over. No one wants the HPPs, the people raised their hands.” said he left the meeting after that.

He described the Dzevrula River as at the heart of the area and his fears that it will be badly affected.  

“The river’s natural flow will disappear,” he said. “The river brings life and joy to the area and without it the lively atmosphere and the gathering of people will be lost. People have livestock, and they drink water from the river,” he added.

A document uploaded to the website of the Ministry of Environmental Protection states that the government has asked Imer Energy Capital to refile the scoping report on the Dzevra project to reflect the concerns of residents in the area.

In other areas, residents say they are completely in the dark about the HPPs planned for their local rivers. 

Oto Kobakhidze, a 30-year-old resident of the village of Sazano, in Georgia's central western Imereti region, learned from online media reports that the government had approved the construction of an HPP there by Imer Energy Capital. As the HPP has less than 2 MW capacity and is a standalone plant, there is no requirement for the company to consult the public.

Kobakhidze, who owns a small family wine shop, told OCCRP that the Dzusa River and waterfalls in his village are essential to his business. 

“The river and these natural attractions draw tourists, and when visitors come to see the waterfalls, tour companies often aim to provide them with a more comprehensive experience.” he said. “Since my place is conveniently located near the river, they frequently bring the tourists here after their waterfall tours.”

Kobakhidze added that water levels were already much lower than in the past — and that building HPPs could make matters worse. 

"As far as I remember, in my childhood, the river was much different and many swimming spots have already disappeared,” he said. “In my father's generation, the river was even more abundant and there were certain spots where the waters reached depths of several meters. Nowadays, a person can barely even swim there. If someone now artificially interferes, everything will be completely lost and destroyed."