How a Georgian energy deal is structured decides which permits and contracts transfer automatically, which consents you need, how the deal is taxed and how risk is shared between buyer and seller. This guide compares share deals, asset deals and joint ventures for power assets in Georgia, explains the tax basics and the approvals to plan for, and covers development-stage and financing structures. It is general information as of October 2026, not legal or tax advice.
Share deal or asset deal?
| Share deal (buy the project company) | Asset deal (buy the plant) | |
|---|---|---|
| Licences and permits | Stay with the company | Must be transferred or reissued; the environmental decision can be transferred through an accelerated 10-day procedure (source) |
| Contracts (PPA or CfD, grid connection, O&M) | Stay in place, subject to change-of-control clauses | Must be assigned, usually with counterparty consent |
| Liabilities | Buyer takes on the company's history | Cleaner separation from past liabilities |
| Land | Stays registered to the company | New registration in the Public Registry |
| VAT | Share transfers are generally exempt from VAT | Asset sales can attract VAT at 18% (source) |
| Due diligence | Wider: corporate, tax and litigation history | Focused on the assets and their permits |
For operating plants, a share deal is usually the simpler route, because licences, the environmental decision, the PPA or CfD and the grid agreement stay in the project company. Asset deals suit carve-outs or companies with problem histories.
Tax basics for energy deals
| Tax | Rule |
|---|---|
| Corporate income tax | 15%, under the Estonian model since 2017: profits are taxed when distributed, not when earned (source) |
| Dividends to non-residents | 5% withholding tax, lower under some double tax treaties (source) |
| Interest and royalties to non-residents | 5% withholding tax, treaty relief possible (source) |
| VAT | 18% standard rate (source) |
| Property tax | Up to 1% of the average book value of fixed assets (excluding land) (source) |
| Transfer and stamp taxes | None in Georgia (source) |
Under the Estonian model, a project company that reinvests its cash pays no corporate income tax until it distributes profits. Holding structures, treaty access and the timing of dividends therefore matter more than in a classic profit-tax system. Take tax advice on the specific structure.
Approvals and consents to plan for
- Regulator: plants above 15 MW hold a GNERC generation licence; check the licensing rules for any change of owner (source).
- Offtake counterparty: consent of ESCO under a legacy PPA or a CfD, which runs for 15 years from commissioning (source).
- Lenders: change-of-control consents, or refinancing at closing.
- Government agreements: conditions in any memorandum under which the plant was developed.
- Competition clearance: merger control filing if the parties meet the notification thresholds.
- Grid operator: assignment or confirmation of the connection agreement.
Joint ventures
JVs are common when a foreign investor partners with a Georgian developer. Key terms:
- Board composition, reserved matters and deadlock resolution.
- Who operates the plant and on what terms.
- Funding obligations for capex and cost overruns.
- Dividend policy, which matters under the Estonian tax model.
- Transfer restrictions, pre-emption, tag-along and drag-along rights.
- Exit routes and valuation mechanisms.
Development-stage deals
For projects not yet built, link payments to the milestones that remove risk:
| Milestone | Why it matters |
|---|---|
| Environmental decision issued | Required before permits take effect; lapses if work has not started within 7 years (source) |
| Grid connection agreement signed | Capacity is the scarcest resource for wind and solar |
| CfD awarded or PPA signed | Secures 15 years of supported revenue (source) |
| Construction permit and land secured | Allows financial close |
| Commercial operation | Final payment or earn-out |
Deferred payments, earn-outs and escrow protect the buyer against a project that stalls.
Financing structures
- Project finance: senior debt from development banks (EBRD, ADB, IFC) and local banks, secured on the project company's shares, accounts and contracts.
- Equity bridge or mezzanine: fills the gap during construction.
- Vendor financing or deferred consideration: useful in smaller deals.
- Documents: facility agreement, security package, intercreditor agreement, and direct agreements with key counterparties giving lenders step-in rights.
Match the currency of debt to revenue where possible, because CfD and market revenue are increasingly in lari.
Price mechanisms
- Locked box: price fixed on a past balance sheet; suits stable operating plants with clean accounts.
- Completion accounts: price adjusted at closing; suits plants with seasonal working capital or recent capex.
- Specific indemnities: for known issues such as land registration gaps, permit conditions or tax audits.
Our transaction advisory team structures and negotiates energy deals in Georgia, working with legal and tax advisers. See also our guides to buying a hydropower plant, the energy asset due diligence checklist and the electricity market and CfD auctions.
Planning an energy acquisition or JV in Georgia? Contact us.
This article is general information, not legal, tax or investment advice. Confirm the treatment of any transaction with qualified advisers.
