To increase the rate of energy efficient renovation of Georgia’s buildings a number of preparatory and regulatory actions, identified as gaps during the NAMA preparation process, need to be carried out. Therefore the NAMA is split into two phases: phase I-readiness phase and phase II-implementation phase. This first phase can be seen as a readiness programme that will allow the country to build capacity, knowledge and awareness towards the topic of energy efficiency and low carbon buildings. The first phase therefore focuses on developing the capacity in the Georgian public sector to be able to pilot renovation activities and energy performance contracting in public buildings. This phase has the clear objective of creating the structures to enable the scale up of activities towards the residential sector. Under the readiness programme activities will be carried out to further advance the understanding of the Georgian building sector and create pillars to support energy efficiency measures within the country. It will also be an opportunity to identify a suitable implementing agency within the country to carry out the envisioned work in the public sector and beyond.

These additional preparatory cost of the readiness phase are considered as significant barrier by the central and local governments, hindering them to widely implement EE building programmes.

Based

Based on energy audits of typical buildings carried out in Georgia’s cities it is assumed that around 30% of emissions savings can be achieved through the envisioned renovation activities. which corresponds to 0.02 t (20 kg) CO₂eq per sq.m per annum. In monetary values, annual energy savings  per sq.m is maximum 2.88 Euro (8 GEL) and for rehabilitated 60 000 sq.m savings will be around 60 000*2.88= 172 800 Euro annually. For the ten years period the project will reach reduction of 12 000 t CO₂eq and financial savings (only as a results of energy savings) 1 728 000 Euro. As it is mentioned above 300 Euro is estimated for full rehabilitation of per sq. m including EE measures. The latest covers 30% of total costs (100 Euro). Relevantly EE measures for 60 000 sq.m need 6 000 000 Euro. Taking into consideration monetary savings for ten years final expenses are 6 000 000 -1 728 000= 4 272 000 Euro. Cost per ton of CO₂eq= 4 272 000/12 000 = 356 Euro.   Two key issues should be mentioned here: savings on annual fixation of old/ deteriorated buildings caused after their renovation are not taken into consideration because they are not estimated at this stage (this could improve financial parameters of the project) and energy tariffs in Georgia is quite low (in this case investment is estimated in  Euro exchange rates off which goes up and tariffs are in GEL and stay the same, of course this worsen financial parameters of the projects).  This can be scaled up by targeting a larger share of buildings and more savings through energy efficient renovations can be achieved compared to the business as usual projects described in Georgia’s INDC.

Some sustainable development benefits should be highlighted here:

• Energy security and economic benefits at national level: Energy security is an important priority of country. All national calculated reference scenarios further indicate an increase in energy use as the country continues to develop. The increase in energy use goes hand in hand with an increase in energy imports under business-as-usual. Facilitating energy efficiency gains within Georgia can therefore offer great benefits with respect to energy security. Limitation of energy import contribute to the country's macro-economical parameters;
• Economic benefits at the households level that are achieved by strengthening energy efficiency measures in buildings include job creation, due to increase in renovation activities, energy auditing as well as jobs in the construction and energy efficient material production. This benefit will also be seen through the implementation of the NAMA in which market creation for energy efficiency services and products form a key element.
• Social and health benefits are envisaged as a long term outcome of NAMA once it stimulated the wider adoption of EE refurbishments through the residential sector. Not all public buildings (including schools and kindergarten) are being heated 100% and temperature inside the building does not always correspond to established standards. The worst situation in terms of under-heating of buildings is observed in residential sector.  Due to low-income and limited access to capital to invest in heating systems often only part of the home is heated in Georgian buildings. The low energy efficiency of residential buildings in Georgia further leads to energy loss and waste that increases the issue of low comfort levels inside dwellings. There is a well-documented link between poorly heated homes and several negative health effects. These include cardio-vascular and respiratory diseases, as well as more minor illnesses such as cold and flu;
• Environmental benefit are anticipated on a long –term due to the avoidance of the use of unsustainable fire wood for heating, in private as well as public houses.

The Georgian government has submitted its Intended Nationally Determined Contribution (INDC), and has been further developing its Low Emission Development Strategy (LEDS). Georgia’s INDC foresees a mitigation target of 15% by 2030 below the optimistic BAU scenario and has further set an ambitious conditional target of 25% by 2030 below the same optimistic BAU scenario in case that sufficient international funding can be secured. The energy efficient refurbishment NAMA is one of the actions planned to be implemented in preparatory pre-2020 period to pave the way towards low carbon buildings in Georgia.

The Georgia Action Plan for the EU’s European Neighbourhood Policy programme includes plans to continue working on regional infrastructure for energy transit and development across the Caspian and Black Sea region. Of particular relevance is that this agreement entails a gradual convergence towards the principles of the EU internal electricity and gas markets, including the commitment to progress in energy efficiency and the use of renewable energy sources (Energy Charter Secretariat 2012).

The adoption of the EU Association Agreement has significant consequences for the energy and building sector. In general terms, the Association Agreement requires Georgia to assume more responsibility for mitigation, to contribute to the development of regional energy security and energy infrastructure in the Southern Corridor, to promote energy efficiency, and to restructure internal energy markets for electricity and natural gas so as to ensure competition, efficiency and transparency.