Electricity TariffReform and EnergyAffordability in Georgia: Distributional Impacts andPolicy Implications © 2026 International Bank for Reconstruction and Development / The World Bank1818 H Street NW, Washington, DC 20433Telephone: 202-473-1000; Website:www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusionsexpressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governmentsthey represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors,denominations, links/footnotes and other information shown in this work do not imply any judgment on the part of The World Bankconcerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank,all of which are specifically reserved. Rights and Permissions The material in this publication is subject to copyright. Because the World Bank Group encourages dissemination of its knowledge,this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution— Please cite the work as follows: World Bank. 2026.Electricity Tariff Reform and Energy Affordability in Georgia:Distributional Impacts and Policy Implications. Washington, DC: World Bank Group. Translations— If you create a translation of this work, please add the following disclaimer along with the attribution:This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bankshall not be liable for any content or error in this translation. Adaptations— If you create an adaptation of this work, please add the following disclaimer along with the attribution:This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the soleresponsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content— The World Bank does not necessarily own each component of the content contained within the work.The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the workwill not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If youwish to reuse a component of the work, it is your responsibility to determine whether permission is needed for that reuse and toobtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Publishing and Knowledge Division,The World Bank, 1818 H Street NW, Washington, DC 20433, USA; email:pubrights@worldbank.org Cover and other pictures: Designed and generated by Team Design at Midjourney.Report and Cover design: Team Design & A.K. Contents AcknowledgmentsviABSTRACT1ONE:Introduction2TWO:Electricity Tariffs and Pricing Scheme3THREE:Background on Energy Demand Patterns and Public Perceptions63.1.Energy Profile and Consumption63.2.Public Perceptions on Electricity, Gas and Heating Infrastructures and Electricity Tariffs10FOUR:Elasticity of Electricity Demand144.1.Price Elasticity144.2.Income Elasticity16FIVE:Electricity and Energy Affordability175.1.Electricity and Energy Poverty175.2.Distribution of Subsidized Electricity21SIX:Distributional Impact of Electricity Tariff Increase24SEVEN:Conclusion and Policy Implications30REFERENCES31ANNEXA:Characterization of the GeorgianPopulation33ANNEXB:Methodological Details on the Elasticity of Electricity Demand34B.1.The Model34B.2.Regression Specification35B.3.Identification and Assumptions35B.4.Relevance orInclusionRestriction36B.5.ExclusionRestriction36ANNEXC:Expected Energy and Electricity Poverty by Region in 2030 for All Scenarios37ANNEXD:Projections under an Unbalanced Growth Scenario39 Figure1Evolution of electricity tariffs in Georgia4Figure2Energy expenditure distribution (by source, region, and area)7Figure 3Electricity and energy consumption by month and distribution of households withinthe consumption block per month9Figure4The ratings of infrastructure facilities in urban and rural areas (share of households)11Figure 5The ratings of infrastructure facilities across regions (share of households)11Figure 6Share of households that experienced an electricity cut-off in the last 90 days12Figure 7Priority of improving services (share of households)12Figure 8Highest priority of improving services by location (share of households)13Figure 9Share of households considering that electricity tariffs are too high13Figure 10Price elasticity of demand along the distributi