Regulator sets new tariffs for BGEO Group’s water utility business

BGEO Group PLC (the “Group” or “BGEO”), announces that Georgian National Energy and Water Supply Regulatory Commission (“GNERC”), the independent body that regulates the Group’s utility and energy business – Georgia Global Utility (“GGU” or the “Company”), has approved new tariffs for water supply and sanitation (“WSS”) services. The tariffs have been updated according to the new methodology adopted by GNERC in August 2017, which is based on international best practice and represents a hybrid method of “cost plus” and “incentive based” methodologies, where revenue is determined based on a company’s Regulatory Asset Base (RAB). The return on investment, referred to as WACC in the methodology, for the first regulatory period, defined as three years in the methodology, is set at 15.99% (up from 13.54% in 2017).

The new WSS tariffs have been set for a three year regulatory period, effective from 1 January 2018. The WSS tariffs in Tbilisi have increased by 23.8% for residential customers and decreased by 0.4% for legal entities. The increase in residential tariffs is the first step towards gradually unifying the WSS tariffs for all customers.