Lack of laws and corruption that led to the rapid growth of mining farms led to an energy crisis in Abkhazia
The operation of the largest hydroelectric power station in the Caucasus, the Inguri hydroelectric power station, will be suspended from January 20 to May 1 for repairs. The project cost is 45 million euros. Of this amount, 7 million is a grant from the European Commission, and the remaining 38 million euros were provided to Georgia by the European Bank for Reconstruction and Development. The repair work will be carried out by Georgian and German specialists. The Inguri hydroelectric power station was last repaired 15 years ago.
“This time, quite large-scale work will be carried out – cementing the tunnel, clearing sedimentary silt, repairing electromechanical parts, which ultimately will reduce water losses at the station and increase its production,” said Georgian Minister of Economy Natia Turnava.
It is noteworthy that the construction of the largest hydroelectric power station in the Caucasus on the Inguri River, with a capacity of 1300 MW, is located both on the indisputable territory of Georgia and the breakaway Abkhazia. In 1992, an agreement was reached between the Georgian and Abkhaz sides on the distribution of electricity generation from the Inguri hydroelectric station in the proportion of 60% – to Georgia, and 40% – to Abkhazia. Despite this, in recent years Abkhazia has received much more, since electricity consumption in this region has increased by about ten times. So, in winter, 95% of the electricity generated at the Inguri and Perepadnye HPPs (which are part of the Inguri hydropower complex) has been consumed by Abkhazia for several years. According to Abkhaz sources, the rise in electricity demand is due to the growing number of mining farms in the breakaway region. At the same time, according to the Abkhazian company Chernomorenergo, about 70 percent of subscribers in this region do not pay electricity bills..
Energy crisis in Abkhazia
Cheap electricity, the lack of laws governing cryptocurrency activities, as well as a corrupt system to bypass bans have contributed to the rapid growth of mining farms in Abkhazia..
As a result, the energy crisis, as well as rolling power outages, became a daily reality in the occupied region in winter, even though at this time of the year Georgia gives Abkhazia almost all the electricity produced at the Inguri power plant..
With the Inguri hydroelectric station being closed for repairs, the separatist authorities were forced to pass a law temporarily banning mining farms from December 20, 2020 until June 1, 2021. Miners were restricted from accessing the Internet, although the measures taken turned out to be ineffective, as the owners of the farms found ways to resume work, for example, by renting servers in Russia and launching a “proxy”, using a VPN service, connecting satellite Internet, and so on..
According to official data, since December 29, 184 mining farms have been de-energized in Abkhazia, while the separatist authorities admit that they are not able to control objects mining cryptocurrency.
Mining was banned in Abkhazia earlier, in 2018, but this did not affect the growth of mining farms in the region..
Who will pay the bill?
During the years when Abkhazia was short of electricity and the energy crisis was aggravated in the region, Tbilisi paid for electricity to cover the deficit in Abkhazia. For this, the Georgian opposition has often criticized the authorities, stating that they export electricity with taxpayers’ money and at the same time “provide assistance to the occupation regime and the Russian occupation forces.”.
At the same time, Tbilisi motivated its decision to provide Abkhazia with electricity by the fact that despite the fact that currently the jurisdiction of the central government of Georgia does not extend to the territory of Abkhazia occupied by Russia, Abkhazia, according to international law, is an integral part of a single Georgian state, and, accordingly, a political the responsibility of the government of Georgia is to take equal care of each of its citizens.
At the same time, Tbilisi announced this year that it would not participate in providing the separatist region with electricity. Minister of Economy of Georgia Natia Turnava She made the following comment in this regard: “The shutdown of the Inguri hydroelectric power station will not damage our energy system, since at this time its generation is seasonally minimal. As for how the power supply of Abkhazia will occur during this period, they have already made a statement that they receive electricity imported from Russia, and payment is carried out on their part, that is, we do not participate in this direction “.
It is noteworthy that payment for the supply of Russian electricity to Abkhazia comes from the funds of the Russian investment program, the volume of which for 2020-2022 is four and a half billion rubles. At the same time, according to the calculations of the Abkhaz media, during the shutdown of the Inguri hydroelectric power station, electricity consumption will cost Sukhumi approximately 3.5 billion rubles..
Initially, the separatist authorities planned to use financial assistance from Russia to repair and modernize water supply systems, energy systems, road infrastructure, and 200 million rubles of the allocated amount were intended for the construction of a regional children’s hospital.
Recall that as a result of the Russian-Georgian war, Russia in 2008 recognized the independence of two Georgian regions – Abkhazia and South Ossetia – and transferred additional troops and weapons to its military bases in these territories. All states of the world – with the exception of Venezuela, Nicaragua, Nauru and Syria – consider these regions as the territory of Georgia under Russian occupation..