The Khudoni dam is a a projected power plant on Inguri River, in the region of Samegrelo-Zemo Svaneti in Georgia. This territory, inhabited by the ethnographic group of Svans, has been UNESCO World Heritage Site area since 1996 due to the exceptional mountain scenery with medieval-type villages and tower-houses preserves by its long isolation.
Electricity demand in Georgia has been on the rise since 2009; electricity consumption in the country has increased since then by between 5 and 10 percent, whilst the cost of electricity has risen by between 7 and 10 percent. Power is now produced in either hydropower plants or thermal power plants that burn imported natural gas. In winter, when river levels are relatively low and demand for electricity is high, country has to import more natural gas, resulting in higher prices of electricity. Electricity cuts, especially in winter are common. In a scenario where all policies are oriented in favor of economic growth, cheap electricity is a top priority for the Georgian government and hydropower will likely become more and more a strategic asset. Khudoni dam would, according to government, accumulate summer excess water and used it to generate additional power during the rest of the year. The operation of the Khudoni HPP will enable the other existing dams, Enguri HPP and Vardnili HPP, to generate additional energy without pumping any further investment into these plants. Khudoni will be the second largest-capacity plant in the Georgian energy system, after the Enguri HPP, and will account for almost 16 percent of the country's hydropower generation . According to the government, the additional power generated will further strengthen the energy independence of Georgia. The country, in fact, has to purchase 700 million kWh of electricity from the Russian Federation every year. The cost of this imported electricity is 6.64 US cents per kWh. The Khudoni HEP is not a newcomer in the Georgian energy scenario. Its construction dates long time back to 1979; it was then stopped in 1989 due to collapse of the Soviet Union and protests over environmental concern. Following the many effort of the government to push it further nevertheless, the project was again blocked by NGOs in the early 1990s as it was shown to be a construction that contains extreme risks for ecological disaster and requires the resettlement of a number of unique villages (including Kaishi) The adequacy of the investments in hydro for the purpose of impeding the electricity shortage in winter was questioned at that time, since Georgia will still have to resort to expensive thermal generation and imports of natural gas in dry winter months. Nevertheless, the project was revived in 2005, as Mikheil Saakashvili’s government focused on hydropower in an effort to end constant power outages and to make the country a net exporter of energy. Since 2005 World Bank has been involved in the negotiations with the Georgian government regarding the Khudoni HPP and it approved a technical assistance grant of USD 5 million. Local population of Svans peoples of at least 14 villages oppose the project for the social impacts of resettlement and for the ecological consequences in a fragile mountain area. The organization Bankwatch writes that "The Khudoni HPP will displace around 2000 people (of the 12 000 who live in Upper Svaneti). A village to be fully resettled is Kaishi with its 800 inhabitants. One fifth of Khaishi’s households is recorded as socially vulnerable and is living on allowances, the majority relying on agriculture for their subsistence. They fear that their situation will only deteriorate with the resettlement. On 19 September 2013 there was a protest action against the construction of the Khudoni HPP and other large hydro power stations that took place in Tbilisi. It was organized on the initiative of Lasha Chkhartishvili, the author of ecological part of Georgian Dream coalition's pre-election programme, Association of Human Rights Defenders and other non-governmental organisations of Georgia . 200 families of Khaishi even took a traditional oath in church, vowing they would protect Kaishi from flooding or, should they fail, face a curse that will haunt them and their families for generations." According to Bankwatch and a recent report by from a field visit by the organization Re:common, the situation was worsened by the fact that in 2012 more than 1500 ha land, part of which was traditionally owned by the local population yet not officially registered, were sold by the Georgian state to the company Trans Electrica for one dollar. Locals had not been informed about the deal. [2, 3] Again, Bankwatch reports  that "Georgia’s Ombudsman Ucha Nanuashvili, who has already voiced his concerns about the project, stated after meeting locals that: "there are serious violations and too many questions to which the investor company Transelectrica has to answer. It is incomprehensible why measurements and registration of the property should happened now even though the property was already transferred to the company." Nanuashvili offered to organize and facilitate a dialogue between locals, Transelectrica and the Georgian Ministry of Energy on February 4. Yet neither Transelectrica nor the ministry sent representatives to the meeting. Nanuashvili regretted their refusal, noting that it will further complicate reconciling the increasingly entrenched positions.”
Apart from ecological concerns due to flawed environmental assessments of the project and its cumulative impacts with other existing and proposed projects on the watershed , Bankwatch and other organizations highlight preoccupations around: -Safety issues due to seismic activity and land slides; the issue of seismic risk first came on the agenda after the earthquake in Armenia in 1988. -Resettlement and lack of legal protection; "Georgia’s legislation does not address the issue of involuntary resettlement caused by infrastructure projects. The Environmental Impact Assessment (EIA) system is ineffective in Georgia, both in terms of providing the public with information and opportunities for public participation. An unclear legal rights regime offers no or minimal protection for communities that make customary use of land that traditionally was in their hands. Unregistered land plots can literally be grabbed by investors for infrastructure projects. In addition to the threat of losing their land or being resettled, farmers may have to face reduced access to water for irrigation or higher risk of flooding due to dam constructions. Both exposes them to an increased food insecurity."  -Tax revenues and offshore company: The project company, Trans Electrica Limited, incorporated in the British Virgin Islands, is represented by Indian nationals who have been so far silent about the beneficial owners of the company and the sources of financing. The terms of the agreement for the construction of Khudoni HPP on a build, own and operate basis has been changed several times by the Georgian government and Trans Electrica Ltd. The project is heavily delayed but it is unclear whether the company has paid any penalties for delayed works. While electricity exports will improve Georgia’s trade balance, they will not generate fiscal benefits for the country as export is factually exempt from taxation with a tax rate of zero percent. Apart from income tax on salaries, Trans Electrica Ltd. will only pay a property tax of 1 percent. It will not pay for the water usage. -Doubtful Energy Independence arguments: "The contract signed by the concessionaire and the Georgian government will award 91 percent of the Khudoni generated electricity for exports. Georgia is only guaranteed to buy annually 133.9 mln kw/h (or only four days of power consumption in Georgia) at a fixed price of 5.84 US cents during the first ten years."  -Increase of electricity tariff, while the people living near to the Enguri Hydro, Georgia’s largest hydro project producing 40% of Georgia’s electricity consumption, still experience problems with access to energy. According to a leaked World Bank document, the basic costs of the project would be at least USD 780 million, while the production tariff would be 4 US cents per kw, and the economic return would be only 5%.