Executive summary
Georgia’s latest economic data show that energy and utility infrastructure are the “invisible foundation” of the economy. The sector may not always appear as the largest by turnover, but it determines the competitiveness of almost every other sector: production, construction, transport, ICT, tourism and trade.
According to Geostat data for Q1 2026, turnover in electricity, gas, steam and air conditioning supply reached GEL 1.837 billion, up 6.7% year-on-year. Output reached GEL 781.2 million, an increase of 5.6%.
In water supply, sewerage, waste management and remediation activities, turnover reached GEL 152.1 million, up 17.5%, while output reached GEL 165.1 million, an increase of 15.5%.
BTU researchers interpret these figures as a reminder that energy and utilities should not be viewed only as separate sectors. They are the basic infrastructure of economic development. If energy, water, networks, waste management and utility services are not stable, accessible and efficient, the rest of the economy cannot develop to its full potential.
Main analysis
Energy is the backbone of the economy, not just a separate sector
Energy is often discussed as a separate sector: electricity generation, gas supply, networks, tariffs and investment. But in a modern economy, energy plays a broader role. It is a condition for cost control, stability and growth across all other sectors.
Production needs energy for machinery and equipment. Construction needs it for materials, equipment and processes. ICT needs it for servers, data centers, networks and digital infrastructure. Tourism needs it for hotels, transport and service quality. Trade needs it for warehouses, cooling systems, lighting and supply chains.
This means the economic importance of energy should not be measured only by its turnover or output. Its wider significance lies in how it affects costs and competitiveness across the whole economy.
Energy turnover is growing, but its strategic role is larger than its statistical share
In Q1 2026, turnover in electricity, gas, steam and air conditioning supply increased from GEL 1.722 billion to GEL 1.837 billion, or by 6.7% year-on-year. Output increased from GEL 740.2 million to GEL 781.2 million, or by 5.6%.
The sector accounted for 3.0% of total business sector turnover and 3.4% of business sector output. At first glance, this may appear to be a moderate share. But the sector’s real impact is much broader because energy prices and supply reliability affect every major economic activity.
If energy is expensive or unpredictable, production costs rise, construction becomes more costly, logistics becomes less competitive, data centers become harder to operate and business risk increases. If energy is stable, competitive and efficient, it supports wider economic growth.
Utility infrastructure determines the quality of economic development
Water supply, sewerage, waste management and environmental utility services often receive less attention in economic debates, but their importance is increasing. In Q1 2026, turnover in this sector increased from GEL 129.5 million to GEL 152.1 million, or by 17.5%. Output increased from GEL 142.9 million to GEL 165.1 million, or by 15.5%.
This growth shows that utility infrastructure is becoming a more active part of the economy. Modern cities, tourism, industrial zones, housing markets and regional development require more than electricity. They require water, sanitation, waste management, functioning networks and environmental standards.
If Georgia plans to develop more tourism, more construction, more production and more digital infrastructure, utilities must not grow only in response to pressure. They need to be planned ahead of demand.
Energy remains strategically important for investment
Foreign direct investment data show that energy attracted USD 31.9 million in Q1 2026, accounting for 11.8% of total FDI. This made energy one of the most important investment sectors.
This indicates that energy remains strategically important for investors. But for Georgia, the question is not only the volume of investment. It is also the type of energy infrastructure being built: generation capacity, network strength, lower losses, energy efficiency and readiness for new demand.
New demand is already visible: production growth, potential data centers, ICT expansion, tourism activity, construction scale and the future of electric mobility will all increase pressure on the energy system.
Energy and transport costs are economy-wide risks
The construction cost index provides an important signal for energy and utilities as well. In April 2026, the cost category of transportation, fuel and electricity increased by 12.7% year-on-year and contributed 1.61 percentage points to the annual increase in the construction cost index. Month-on-month, the same category increased by 6.4%.
This shows that energy and fuel are no longer only internal issues for the energy sector. They are part of construction costs, production competitiveness, logistics costs, tourism service prices and housing affordability.
BTU researchers argue that energy efficiency is becoming as important as energy supply. Georgia does not just need more energy. It needs smarter use of energy.
The digital economy cannot grow without energy
The growth of Georgia’s ICT and digital economy gives energy a new strategic role. Digital infrastructure – servers, data centers, cloud services, AI systems and telecommunications networks – depends on energy.
If Georgia is serious about developing Georgian AI, data infrastructure, digital service exports and a technology ecosystem, energy must be at the center of that strategy. Data centers, AI laboratories and high-load digital platforms cannot operate sustainably without a stable, predictable and competitive energy supply.
This means the future of energy is no longer only about power plants, generation or grids. It is linked to the data economy, cybersecurity, Georgian AI and the country’s digital sovereignty.
Utility infrastructure shapes the competitiveness of cities and regions
A large share of Georgia’s economic activity remains concentrated in Tbilisi. In this context, utility infrastructure is especially important for regional development. A region may have tourism potential, industrial land or agricultural opportunities, but if water, sewerage, waste management, electricity and related infrastructure are weak, investment and business cannot develop fully.
Utility infrastructure also determines quality of life. For families, tourists, investors and local entrepreneurs, reliable water, cleanliness, energy and waste management are basic expectations.
Energy and utility infrastructure should therefore be understood as a precondition for regional development.
Key findings
- Turnover in electricity, gas, steam and air conditioning supply reached GEL 1.837 billion in Q1 2026, up 6.7% year-on-year.
- Output in the same sector reached GEL 781.2 million, up 5.6%.
- Turnover in water supply, sewerage, waste management and remediation increased by 17.5%, while output rose by 15.5%.
- The energy sector attracted USD 31.9 million in FDI in Q1 2026, equal to 11.8% of total FDI.
- Transportation, fuel and electricity costs increased by 12.7% year-on-year in the construction cost index, showing the wider economic role of energy and fuel.
- Energy is not only a sector; it is the foundation of competitiveness for production, logistics, ICT, tourism and construction.
- The next stage requires energy efficiency, stronger networks, better utility infrastructure, renewable development and stable energy for the digital economy.
Data and evidence base
Georgia’s business sector turnover reached GEL 61.967 billion in Q1 2026, while business sector output reached GEL 23.294 billion. Turnover increased by 10.7% and output by 12.4% year-on-year.
Turnover in electricity, gas, steam and air conditioning supply increased from GEL 1.722 billion to GEL 1.837 billion, or by 6.7%. Output increased from GEL 740.2 million to GEL 781.2 million, or by 5.6%.
Employment in the energy sector increased from 16,899 to 17,025 people, or by 0.7%.
Turnover in water supply, sewerage, waste management and remediation increased from GEL 129.5 million to GEL 152.1 million, or by 17.5%. Output increased from GEL 142.9 million to GEL 165.1 million, or by 15.5%. Employment increased from 16,462 to 16,778, or by 1.9%.
In Q1 2026, FDI in energy amounted to USD 31.9 million.
According to the construction cost index, transportation, fuel and electricity costs increased by 12.7% year-on-year in April 2026.
Why this matters for Georgia
Energy and utility infrastructure matter for Georgia because they form the base of economic development. If energy, water, networks and utility services are weak, other sectors cannot reach their full potential.
This is especially important now, as Georgia seeks to develop production, the digital economy, tourism, construction, logistics and regional business at the same time. All of these sectors require stable energy and high-quality infrastructure.
The strategic importance of energy is increasing further in the age of AI and the data economy. Digital services, data centers, AI systems and technology businesses cannot grow without energy. Energy security is therefore also part of digital competitiveness.
Utility infrastructure determines quality of life. Clean water, waste management, sewerage, reliable energy and environmental standards are not only technical issues. They shape the future of cities, regions, tourism and business.
BTUAI assessment
BTUAI assesses the Q1 2026 data as showing stable growth in energy and utility infrastructure, but also a broader strategic challenge: the next stage of Georgia’s economy will depend much more heavily on energy and infrastructure than the previous stage did.
Production, transport, construction, tourism and the digital economy cannot grow without a strong energy and utility base. Energy efficiency is becoming especially important because supplying more energy is not enough. Georgia must also use energy more intelligently.
In BTUAI’s view, Georgia’s energy and utility infrastructure priorities should be built around five directions: stable supply, energy efficiency, stronger networks, better utility infrastructure and readiness for the digital economy.
If Georgia turns these directions into a unified strategy, energy will no longer be only a cost or tariff issue. It will become a foundation of productivity, technological development, regional growth and economic security.
Article identification
Article type: Sectoral analytical article
Topic: Georgian economy, energy, utility infrastructure, water supply, waste management, energy efficiency
Geographic focus: Georgia
Period: Q1 2026; construction cost index – April 2026
Main sources: National Statistics Office of Georgia, business sector results, foreign direct investment statistics, construction cost index
Prepared by: BTUAI Research Team, Business and Technology University
Platform: BTUAI.ge
Publication year: 2026
Methodology
This analysis is based on publicly available official statistical data, including Geostat’s Q1 2026 business sector results, foreign direct investment statistics and cost-related signals from the April 2026 construction cost index. The data were analyzed by turnover, output, employment, investment, utility infrastructure dynamics and the broader economic role of energy.
The purpose of the article is not to assess individual energy projects, companies or tariffs, but to identify the broader economic significance of energy and utility infrastructure and highlight practical implications for business, regional development, the digital economy and Georgia’s long-term competitiveness.
Limitations
This article is based on publicly available data and analytical interpretation. It is not an official statistical report, energy forecast, investment, financial, legal, tax or infrastructure advice. Some indicators may change after new or revised data are published. Specific business, investment or infrastructure decisions should be made in consultation with relevant professionals.
Sources
National Statistics Office of Georgia – Business Sector Results, Q1 2026.
National Statistics Office of Georgia – Foreign Direct Investment in Georgia, Q1 2026.
National Statistics Office of Georgia – Construction Cost Index in Georgia, April 2026.
FAQ
Why is energy important for Georgia’s economy?
Because energy determines the cost, stability and competitiveness of production, construction, logistics, tourism, ICT and utility services.
What does the Q1 2026 data show about energy?
Turnover in electricity, gas, steam and air conditioning supply increased by 6.7%, while output rose by 5.6% year-on-year.
What is happening in utility infrastructure?
Turnover in water supply, sewerage, waste management and remediation increased by 17.5%, while output increased by 15.5%.
Why is energy efficiency important?
Because economic growth should not depend only on more energy supply. Efficient energy use reduces costs, increases competitiveness and lowers pressure on infrastructure.
How are energy and the digital economy connected?
AI, data centers, servers, telecommunications networks and digital services require stable and competitive energy. Energy is fundamental infrastructure for the digital economy.
Keywords
Energy Georgia, utility infrastructure Georgia, energy efficiency Georgia, electricity sector Georgia, water supply Georgia, waste management Georgia, data centers Georgia, digital economy Georgia, BTUAI, Business and Technology University.
Citation format
BTUAI Research Team. “What Should Georgia’s Energy and Utility Infrastructure Sector Consider Based on the Latest Economic Data?” Business and Technology University, BTUAI.ge, 2026.
Prepared by the academic team of Business and Technology University and the BTUAI Research Team.
Tbilisi, Georgia