Georgian Energy Project Wins Prestigious International Award
USAID’s work with the government of Georgia to transform the largest Georgian state-owned energy utility from a corrupt, inefficient operation into a trusted, well-functioning company won the Platinum Award at the 2006 Management Awards ceremony in London. The award was given jointly to USAID and the Government of Georgia.
Each year, the Management Consultancies Association, the industry body for management consulting firms, organizes the Management Awards to recognize excellence in client work. An independent panel of senior business figures, journalists, and academics selects the most value-adding, innovative, and successful assignments.
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The reform team collects the prestigious Platinum Award in London (from left: Irakli Elashvili, UEDC Chief of Staff; Dean White, UEDC General Director; Alexander Khetaguri, First Deputy Minister of Energy; and Mamuka Kikalishvili, UEDC Regional Operations Manager)
Photo Credit: Misha Berinashvili |
In 2003, USAID launched the Georgia Energy Security Initiative, which includes a multi-year management contract for Georgia’s largest electric utility, the United Energy Distribution Company (UEDC). Serving 70% of Georgia’s territory, the UEDC was notorious for corruption, too many staff, an ineffective workforce, and mismanagement – in all, a major contributor to Georgia’s infamous energy crisis.
Often braving personal danger, the USAID-financed management team at the UEDC battled corruption throughout the company and drastically improved its performance. The UEDC now provides customers with reliable electricity for the first time since Georgia's independence.
The company is paying its taxes and its foreign energy suppliers in full and is paying higher salaries to its employees. It is also re-investing to improve customer service. Incredibly, customer payments for electricity have climbed from as little as 11% in 2003 to over 75% in 2006, with further improvements likely.
“We definitely appreciate the work of the UEDC management team. They took on the challenge of reforming a company that many felt was impossible to turnaround. They have worked in partnership with this government effectively and we consider the reform of the UEDC to be one of the most – if not the most – important successes to date in our energy reform program,” said Alexander Khetaguri, First Deputy Minister of the Ministry of Fuel and Energy of Georgia.
Although there remain further challenges ahead, including the privatization of the company and electricity tariff changes to name a few, the UEDC team has demonstrated the ability to rebuild a company from the ground-up, transforming the company from being a major cause of the country’s energy crisis into a model for reform of state-owned companies.
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