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The Coruh/Chorokhi river system is of great economic importance to both Turkey and Georgia because of its largely undeveloped but economically exploitable potential for hydropower. On both sides of the border a large number of hydropower projects are being implemented unilaterally in which private investors play the key role, following liberalisation of the energy sectors in Turkey and Georgia. This has been promoted in both countries, despite the resulting social and environmental costs, particularly in Turkey. Negative effects-i.e., the changes in sedimentation and the river flow regimes-moving from upstream interventions in Turkey to downstream Georgia-have still not been resolved, and they will put electricity generation in Georgia at risk when the hydroelectricity plants start operating. This article explores regional disputes and the degree of cooperation that exists, and analyses the effect that the efforts of relevant actors to establish regional electricity trading are having on the current problems. The creation of a regional electricity market seems to be opening up a new avenue for cooperation also on water.