The EBRD is stepping up its support for Georgia’s efforts to improve the country’s energy security. The Bank is increasing a $38.5 million loan for the rehabilitation and modernisation of Georgia’s state-owned Enguri hydro power plant by $10 million. Once completed, the overhaul of the facility will increase the output of the plant by at least 15 per cent. The Enguri hydro power plant was built in the 1970s and is located at the border with Abkhazia. Its arch dam is the tallest of this type in the world. With an installed capacity of 1,300 MW, generated in five units, the plant would be able to supply about half of Georgia’s present electricity demand. As the country is a net-importer of electricity, the full rehabilitation of the plant will lessen its dependence from external suppliers. The first phase of the rehabilitation was started in 1998 when the EBRD’s original loan was approved and work is now nearing completion. In addition to urgent repair work it includes the reconstruction of unit 3 and the rehabilitation of the two oldest units at the plant. The second phase includes the rehabilitation of the two remaining units and some additional civil works on the dam. In addition, the project will also support the reform of the local power sector by supporting a law on renewables and energy efficiency by end-2007, the adoption of which is a key element of the agreement. The original loan in 1998 had been co-financed by a US$ 10 million grant from the European Commission (EC) who have now provided an additional grant in excess of USD 2 million for the second phase of the project.