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EA Energy Advisory

Energy News of Armenia

 
December 20, 2016   Reconstructed transmission line to connect Hrazdan TPP and Vorotan Cascade of HPPs

The reconstruction of overhead transmission line Noraduz-Lichk- Vardenis- Vayk-Vorotan-1, stretching for about 230 km and implemented with the funding from the International Bank for Reconstruction and Development, will be completed in the first half of 2017, the ministry of energy infrastructure and natural resources said.

"The greater part of the work has already been carried out. The  purpose of the reconstruction is increasing the reliability of the energy system of Armenia", - the ministry said, adding that the power line will connect  two generating facilities– the Hrazdan TPP and the Vorotan Cascade of HPPs.

"The program is aimed not only at improving the reliability of the power system, but also at  increasing its capacity. As a result of the reconstruction the capacity of transmission line will increase from 250 MW to 310 MW, will improve also its technical specifications, while losses will be reduced from 1.6% to 0.7%," – the ministry said.

The ministry also noted that the saved money will be used to reconstruct the  overhead transmission lines Lalvar and Noyemberyan with capacity of 110 kV stretching for about 50 km, which have been running since 1962.

The reconstruction of the latter two will be carried out by Iranian Gam Arak company that won last August an international tender announced by Armenian government worth $4.4 million. The work is set to begin in 2017.

Source: arka.am

 
December 16, 2016   Construction of two water reservoirs to kick off next year

The head of the Armenian State Committee of Water Resources Arsen Harutyunyan said December 15 that the construction of a water reservoir in Vedi in Ararat Valley with the capacity of 29 million cubic meters will kick off next year and take about four years.

According to Harutyunyan, the construction of the Kap water reservoir is also scheduled to start next year. He also said that the SCADA (Supervisory Control and Data Acquisition) system will be introduced in Armenia to allow effective control of water resources in the country.

"With this system, we can monitor the amount of water in the rivers and reservoirs," - he said. In May an extraordinary session of the Armenian parliament ratified a loan agreement the Armenian government signed with the French Development Agency (AFD) on January 26. The 75 million euro loan will be used to construct the Vedi reservoir in Ararat province. The loan provided with a six-year grace period and 1.29% interest rate is to be repaid within 20 years. 

The project when completed will alleviate the problem of water shortage in the Ararat Valley and allow the transition from mechanical to the gravity irrigation system, which, in turn, will result in saving of electricity. The government’s co-financing is 25 million euros.

The water reservoir is to be built on the rivers Vedi and Khosrov on an area of 120 hectares. The dam’s height will be 70 meters, and the capacity 29 million cubic meters.

According to the government, the Vedi reservoir will increase the area of arable land, as well as reduce releases of water for irrigation from Lake Sevan by 20 million cubic meters per year, said Harutyunyan.

Source: arka.am

 
December 12, 2016   Contour Global to attract $150 million to upgrade Vorotan hydropower plant

Armenia’s Public Services Regulatory Commission (PSRC) has approved the decision of US-based Contour Global company to attract a $150 million loan for the modernization of Vorotan cascade of hydropower plants, located in southern Armenia.

The loan will be provided by HSBC Corporate Trustee Company (a subsidiary of HSBC), the International Finance Corporation (IFC), the Dutch financial company for developing countries (FMO) and the German Society for Investment and Development (DEG). 

The loan will be used to upgrade the facility and repay loans the company had earlier taken from Armenian banks. The $180 million deal between Contour Global and the Armenian government was closed in 2015 August. It is the largest US investment in Armenia.

The total installed capacity of the cascade is 404.2 MW. The cascade consists of three hydropower plants - Spandaryan (installed capacity - 76 MW), Shamb (171 MW) and Tatev (157.2 MW). Vorotan Cascade of HPPs was one of the three largest taxpayers of Armenia in the third quarter of 2015, having paid 16.7 billion drams in taxes. ($ 1 - 483.58 drams).

Source: arka.am

 
November 29, 2016   Reconstruction of Yerevan thermal power plant allowed to save $10 million

The reconstruction of the Yerevan Thermal Power Plant allowed to save $10 million, minister of energy infrastructure and natural resources Ashot Manukyan said today at a meeting with the prime minister.

The minister said that the reconstruction has increased the capacity of the station by 7 MW, reduced gas consumption and due to the use of new technologies increased the turnaround time from 4 to 6 years.

The Yerevan Combined-Cycle Thermal Power Plant, located 10km south from Yerevan, the capital city of Armenia, was inaugurated in April 2010. The plant was constructed in the existing facility of an obsolete plant. 

The upgraded thermal power plant has an installed capacity of 242MW and produces a quarter of the country's electricity production. The project, estimated to cost $247m, was financed by the Japan Bank of International Cooperation (JBIC) in 2007. 

According to Manukyan, the ministry has approved the dates for conducting tenders for the construction of the Armenia-Georgia power transmission line, expected to begin in 2017. He added that construction of another transmission line between Armenia and Iran resumed in September. He added that construction of both power transmission lines will be completed in 2019.

The construction of 400-kilovolt transmission line Iran-Armenia and Armenia-Georgia will enhance the link between the energy systems of the countries. The ministry reminded that power grids of Iran and Armenia operate in synchronized manner. The same is true about Georgia and Russia.

After commissioning the new transmission lines the power grids of all 4 countries will be able to work in synchronous mode with power flows capacity of up to 1200 MW.

Source: arka.am

 
November 9, 2016   Armenia and Asian Development Bank sign $50 million loan agreement for repair of M6 highway

Armenia and the Asian Development Bank (ADB) signed on Wednesday a $50 million loan agreement to improve the transport efficiency and safety of the M6 Highway from Vanadzor in Armenia to the border with Georgia at Bagratashen, one of the most strategic roads for internal and external trade, Armenian ministry of finance said. The agreement was signed by Armenian minister of finance Vardan Aramyan and ADB Armenia Country Director Shane Rosenthal.

The M6 highway is a vital link connecting Armenia with Georgia and beyond, providing the shortest link between the respective capitals: Yerevan and Tbilisi. In 2014, the Bagratashen border crossing handled 0.85 million tons of import and export freight, representing almost half of the country’s total import freight tonnage and goods by road.

The project will rehabilitate and upgrade 51.5 km of the total 90 kilometers of the two-lane M6 highway, as rehabilitation of the remaining 38.5 kilometers will be financed by the European Investment Bank. Facilities and safety along and in the vicinity of this road section in northern Armenia will be improved, and the institutional capacity of the Ministry of Transport and Communications will be strengthened.

ADB is also providing additional support to help the government take proactive steps to increase the budget allocation for road maintenance, and enhance its effectiveness through policy dialogues.

Once completed, the project will help improve access to social services, agriculture, tourism, and jobs, with the aim of reducing regional economic and social disparities. The upgraded road link will particularly benefit the Lori region, a major destination that attracts local and international tourists, by help it transition from its high dependence on minerals and chemicals to a more diversified economy with an emphasis on the tourism and service sectors.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members – 48 from the region. In 2015, ADB assistance totaled $27.2 billion, including co-financing of $10.7 billion.

Source: arka.am

 
November 3, 2016   Iran and Armenia Pre-signed MoU on Gas Sale and Transit

A memorandum of cooperation on sale and transit of gas has been pre-signed during the visit of the delegation of the Armenian Ministry of Energy Infrastructures and Natural Resources to Iran. The MoU was signed between Iran’s National Gas Export Company and Energaimpex CJSC. The document will soon be submitted for signature.

The Armenian delegation headed by the deputy minister of energy infrastructures Haik Harutiunyan had several meetings with energy sector leaders. During the meeting with the deputy minister of oil H. Aragh and A. Amirani the current status of cooperation between the two countries, enlargement of regional cooperation, transit of gas to third countries via the territory of Armenia were discussed.

The delegation had meetings with the minister of energy H. Falahatiani and advisor to minister H. Hayeri. Issues relating to increasing the capacity of electricity transmission lines was discussed, as well as regional cooperation Iran-Armenia-Georgia-Russia after the launch of the new expected infrastructures.

The Armenian delegation met with the Iranian Mapna company which intends to invest in wind power stations in Armenia. In the initial stage, the construction of stations with a total capacity of 50 megawatt is being considered.

The delegation has also visited the main contractor of layout of the third Iran-Armenia high voltage transmission line, Sanir Company. They discussed issues relating to the construction of the high voltage line, the Ministry of Energy Infrastructures and Natural Resources informed.

Source: lragir.am

 
November 2, 2016   PV Stations Will Be Set Up in Armenia

To reduce dependence on imported carbohydrates, industrial solar PV systems will be set up in Armenia.

The head of energy and energy saving department of the Ministry of Energy Infrastructures and Natural Resources Hayk Badalyan said at the beginning of the next year a feasibility study will be carried out in the framework of the Renewable Energy Investment Program and the bid package will be prepared for competitive pricing of solar power stations by a consulting company.

The consulting company has already selected six sites for PV stations. In the result of the studies Gegharkunik, Armavir and Aragatsotn regions were found to be the best and effective sites for this purpose.

The Ministry of Energy Infrastructures and Natural Resources informs that the Renewable Energy Foundation has studied the potential of industrial PV potential in Armenia with the assistance of the World Bank and the Global Environmental Institute. Today there are demo PV modules but their capacities are very small. Such photoelectric transformers based on German and U.S. technology have been installed in U.S.-Armenian Health Center in Yerevan with a 9.8 kW capacity. 

Source: lragir.am

 
September 7, 2016   IFC directs about $240 million to renewable energy projects in Turkey and Armenia

IFC, a member of the World Bank Group, provided over $800 million to support 22 climate-smart investment projects in Europe and Central Asia in fiscal year 2016, helping its clients improve resource and energy efficiency, expand sustainable urban infrastructure, and increase access to renewable energy.

IFC said in a press release that over $220 million of the total was invested in green buildings projects in Turkey, Bulgaria and Georgia, helping to reduce water, heat and energy consumption and losses in commercial buildings. About $240 million was directed to renewable energy projects in Turkey and Armenia, to support the rehabilitation and development of hydro, solar and wind power stations, according to IFC.

A particularly important theme for IFC was sustainable cities, which focuses on developing modern, energy-efficient urban infrastructure, including public transport, water and solid waste management, through state-of-the-art projects and public-private partnerships. In FY16, IFC supported the expansion of the Istanbul metro and Heksagon waste management company in Turkey, which offers solutions to turn urban solid waste into energy and fertilizer, and is now looking for similar sustainable projects across the region. The year also marked IFC’s first green bonds transaction in the region with the Turkish Bank TSKB, to attract institutional investors to finance a portfolio of green projects across industries.

“Every third dollar of our investments in the region over the past year was climate smart,” said Tomasz Telma, IFC Director for Europe and Central Asia. “In addition to finance, we provide advisory services to manufacturing companies and financial institutions across the region to maximize impact, and leverage private sector resources to improve efficiency and invest in new technologies.”

In FY16, IFC invested over $2.9 billion in Europe and Central Asia, including $570 million in mobilized funds, to support the growth of sustainable private companies and contribute to long-term economic development across the region. IFC’s goal is to make climate investments 28 percent of its annual new commitments by 2020.

Source: arka.am

 
August 22, 2016   UNDP in Armenia set to increase energy efficiency across the country

UNDP in Armenia has received a historic US$20 million grant from the Green Climate Fund to increase energy efficiency and reduce costs and CO2 emissions across the country, UNDP reported. The grant is the first for the Europe and Central Asia Region, and second on energy efficiency worldwide.

The funds will enable the project team to upgrade and insulate external walls, entrances, roofs, ceilings, floors and windows of around 6,000 family apartments and over 150 public buildings, including schools and kindergartens. Historically, Armenia suffers from very poorly insulated housing stock. Most of its multi-apartment buildings, built half a decade ago, are products of a different time when energy prices were much lower and environmental concern was not an issue. The current high operational building costs put financial strain on the population and the public sector, including schools, hospitals and ministries. These financial resources could potentially be reinvested into other, more critical areas if energy costs are avoided.

Moreover, Armenia’s rural areas are at a high risk of energy insecurity. Houses built in rural areas are larger than their urban counterparts, if not also more exposed to harsher climatic conditions. Rural populations often depend on wood for heating, which increases pressure on local woodland areas. This UNDP project aims to address energy efficiency issues of houses and public buildings, thereby reducing deforestation and energy consumption. Such interventions would have a real impact on Armenia's greenhouse gas emissions, and future risk of land degradation and landslides.

Speaking about the grant, Diana Harutyunyan, UNDP in Armenia’s Climate Change expert said: “This is one of the largest single investment our office has ever received. We are proud of what such a major investment will mean for the future of our country, as well as the example it will set globally.” According to Harutyunyan, over a third of the country’s energy supply is generated through an ageing nuclear power plant. In the future, the plant is expected to go out of operation, which will increase the demand for energy and likely increase the use of firewood or gas, if not imported resources. All of these preferences would put a significant burden on the environment, worsening the effects of climate change.

The Green Climate Fund, or GCF, is the primary financial instrument of the Paris Agreement, as well as the largest and the most unique. It is targeted at both mitigation (reducing further greenhouse gas emissions), and adaption (adapting to the climactic changes that have already been caused.) The Paris Agreement was reached last December, with world leaders agreeing on a plan to keep the world’s temperatures from rising beyond 2 degrees Celcius. It is expected that GCF’s resources will replenished and it will deliver around $100 billion US per year for assisting the corresponding policies and measures in developing countries.

Source: armenpress.am

 
August 19, 2016   Schneider Electric president for Russia and CIS says Armenia has great potential to develop alternative sources of energy

Armenia has a great potential to become a leader in the development of new technologies in the field of energy saving and renewable energy, Johan Vanderplaetse, Schneider Electric President for Russia and the CIS, told a news conference today in Yerevan. "You have no oil, neither natural gas, but you have another advantage –huge engineering potential,’ he said.

"Alternative energy is experiencing rapid growth worldwide, and the demand for it is growing very rapidly and will increase over the coming decade. In addition, if we want to save our planet, we need to reduce emissions. The only solution to this dilemma is the new technology. And, speaking about new technology, we are primarily talking about solar energy ", said Vanderplaetse.

He added that according to the forecasts of experts, by 2030 about 45% of electricity in almost all countries of Europe and America will be produced through alternative sources such as the sun. "As for Armenia, it has a great advantage - 300 days of sunshine a year. So I'm sure that the new technology will really help Armenia. This is why we are here to study in detail the potential of Armenia." stressed Vanderplaetse.

He said his company and Armenia’s ministry of energy reached an agreement to establish a working group to closely examine all the related issues to prepare a joint roadmap for the localization of these types of technology in the country. "We already have six factories and 12 thousand employees in the CIS. The first market in the CIS is naturally Russia. As one of the largest Western companies, we are ready to play investor anchor’s role for Armenia to show other foreign companies its potential in this area, "- said Vanderplaetse.

Source: arka.am

 
August 11, 2016   Contract was signed on "Replacement of Lalvar-Noyemberyan 110 kV Transmission Lines"

“High Voltage Electric Networks” CJSC and “GAM Arak Industrial” company of Iran signed a Contract on August 11th on “Replacement of Lalvar-Noyemberyan 110 kV Transmission Lines” within the frameworks of “Electricity Supply Reliability” project, financed by the World Bank. The Contract was signed by the General Director of HVEN CJSC Aram Ananyan and Managing Director of “Gam Arak Industrial” company Nasrollah Rahnama.

The event was attended by Deputy Ambassador of the Islamic Republic of Iran to Armenia Shahbaz Solbi, Counselor of the Embassy Abas Ghorbani, Trade Attaché Hmayak Avetisyan and Head of Investment Projects Department of Ministry of Energy and Natural Resources Hayk Harutyunyan.

The Iranian “Gam Arak Industrial” company has won the tender on selection of General Contractor regarding “Replacement of Lalvar-Noyemberyan 110 kV Transmission Lines” with the value of 4 394 456, 24 (four million three hundred ninety-four thousand four hundred fifty-six point twenty four) US Dollars. The works on replacement of 110kV Lalvar-Noyemberyan transmission lines are foreseen to commence in July 2016 and finish in 2018.

Source: hven.am

 
Jul 29, 2016   Armenian government approves changes to north-south transport corridor and stable urban development

Hovik Abrahamyan, Armenian prime minister, held Thursday a regular session of the council coordinating the North-South and Northern Corridor modernization programs as well as Stable Urban Development investment program.

The council discussed changes to the agreement on designing, managing and controlling the procurement project on the Stable Urban Development investment program (Tranche 2, special actions) and to the contract with Egis International consulting group (Tranche 1) and approved them.

The council members also discussed and upheld the results of the tender inn the Stable Urban Development investment program. The Armenian government approved January 14, 2010 the investment program to build the North-South transport corridor, as well as a $500 million framework loan agreement with the Asian Development Bank. The project is being funded also by the Eurasian Development Bank and the European Investment Bank.

The goal of the project is to upgrade Armenia’s main corridor road as part of a broader thrust to improve connectivity, and boost trade, growth and livelihood opportunities in the Caucasus and Central Asia sub-regions. Funds are being released by the Asian Development Bank periodically through a multitranche financing facility.

The transport corridor will stretch from the southern Armenian town of Meghri, on the border with Iran, to Bavra in the north on the border with Georgia. The North-South transport corridor will enable Armenia to mitigate the effects of the blockade imposed by Azerbaijan and Turkey.

According to Armenian officials, the cost of building the North-South transport corridor is estimated at $ 1.5 billion. Currently two sections of the road are being built; one stretches from Artashat to Ashtarak and the second from Ashtarak to Talin.

Source: arka.am

 
Jul 29, 2016   Iran to triple its natural gas export to Armenia

Iran is going to build up its natural gas supply to Armenia from 1 million cubic meters a day to 3 million cubic meters in the next few years, reports PRESSTV . Iranian Oil Minister Bijan Zangeneh said after his meeting with Levon Yolyan, Armenian energy minister, in Tehran that Iran will do it at Yerevan’s request.

Iran, he said, will increase its gas export to Armenia before 2019. He added that Iran has already increased the export to 3.5 million cubic meters per day, since Russian natural gas supply to Armenia through Georgia’s territory ceased temporarily, but it will return to the previous volumes, 1 million cubic meters per day in 40 days after Russia resume supplying its gas to Armenia.

Russia ceased conveying its natural gas to Armenia through Georgia’s territory on July 10 because of the repair of some sections of the core pipeline in Georgia and is expected to resume supplying it on August 10.

Zangeneh also said that Iran sealed a basic agreement with Georgia to send its gas to Georgia through Armenia’s territory.

In his words, Iran is planning to carry out a pilot testing of the supply in the next few months. “Transit of gas to Georgia through Armenia will be carried out through a new organization which has been established by Iran and Armenia,” he said. “The same organization will be in charge of all the issues relating to Iranian gas export to Armenia and also transit of the gas to other regional markets through Armenia.”

According to Armenia’s customs service, in 2015 Armenia imported 2 626.1 million cubic meters of natural gas worth $514.31 million, while in 2014 only 2 493.1 cubic meters worth $499 million were imported (5.3% and 3% growth) – 383.1 million cubic meters worth $72.4 million (against 365.9 million in 2014) from Iran and 2 160.1 cubic meters worth $426.3 million from Russia (82.2% of Armenia’s gas import).

Source: arka.am

 
Jul 21, 2016   EBRD extends second energy efficiency loan to SEF in Armenia

The European Bank for Reconstruction and Development (EBRD) is extending a second energy efficiency loan through its Energocredit facility to SEF International, a VisionFund microfinance institution in Armenia.

SEF International will receive a local currency loan worth US$ 1 million for on-lending to rural customers for energy efficiency investments.

The sub-loans, which are expected to become available from August 2016 onwards, will primarily support investments in energy and cost-efficient heating, cooling, ventilation systems and small business equipment.

As SEF International mainly targets small borrowers, loans are expected to be in the range of US$ 300 to US$ 600, with a 10 per cent grant element for eligible projects provided by the EBRD Shareholder Special Fund.

The EBRD extended the first US$ 1 million facility to SEF International in 2014. The funds were allocated to more than 1,600 customers, mostly from rural regions of Armenia, with an average loan size of US$ 500 equivalent.

Garegin Gevorgyan, CEO of SEF International, said: "We are excited to continue the collaboration with the EBRD, which will help us reach out to people with limited access to such facilities, expanding the range of the products we offer and adding an environmental dimension to our model of social mission and commercial sustainability."

The EBRD is a leading institutional investor in Armenia, having invested over €1 billion in 150 projects in the country’s financial, infrastructure, energy and corporate sectors, with 88 per cent of these projects being in the private sector.

Source: ebrd.com

 
June 2, 2016   International energy corporation to invest 18.9 billion drams in rehabilitation of Yerevan HPP-1

The International Energy Corporation cjsc will invests 18.9 billion drams in a major rehabilitation of the Yerevan HPP-1, Armenian economy minister Artsvik Minasyan told a Cabinet meeting today.

The minister noted that about 9.7 billion drams of that amount are earmarked for purchase of equipment. He said this investment program is expected to create 60 new jobs with an average salary of 232,000 drams in 2016, that will grow to 249,000 drams in 2017 and 265,000 drams in 2018.

"The company plans to ensure stable and safe operation of the Yerevan HPP-1 for production of electricity by using the potential of the surrounding rivers,' Minasyan said.

The majority of shares of the International Energy Corporation, founded in 2003 for the operation of Sevan-Hrazdan cascade of hydropower plants, are owned by Russian RusHydro, which is the largest generating company in Russia with more than 35GW production facilities. ($ 1 - 477.99 drams).

Source: arka.am

 
June 2, 2016   EIB to provide euro 30 million for improvement of Armenian irrigation systems

The European Investment Bank (EIB) will provide Euro 30 million loan to Armenia for financing a program designed to improve the country’s irrigation systems, the State Committee of Water Resources of Armenia said today following a meeting of the agency’s head Aram Harutyunyan with an EID delegation, led by Hans Olbers, director of EIB department in charge of lending to countries participating in EU’s European Neighborhood Program.

The total cost of the program is Euro 80 million. Another 30 million euros are to come from the European Bank for Reconstruction and Development (EBRD) and a 20 million euro grant from the European Neighborhood Program.

According to Olbers, development of water resources and rural communities of Armenia is one of the priorities of EIB's lending policy.

"Our presence here is the first step confirming our interest in promoting the development of agriculture in the region. Therefore, we are ready to support the development of agriculture, as well as training of staff and provision of technical provision,' he said.

The European Investment Bank is the European Union's nonprofit long-term lending institution established in 1958 under the Treaty of Rome. As a "policy-driven bank" whose shareholders are the member states of the EU, the EIB uses its financing operations to bring about European integration and social cohesion.

Source: arka.am

 
April 28, 2016   KfW to provide 10 million euros for Caucasus Power Lines I project

The German KfW bank will provide Armenia with 10 million euro assistance for the implementation of the Caucasus Power Lines I project, finance minister Gagik Khachatryan said today at a Cabinet session, which approved the signing of an agreement to that end.

The total cost of the first phase of the project is 105.2 million euros. This phase is co-financed by the European Investment Bank ($10 million euro loan) and the EU Neighborhood Investment (a $10 million euro grant).

Also 75 million euros will be provided by KfW and 10.2 million euros by the German government.

The project is designed to unite Armenian and Georgian energy systems by building a high-voltage direct current (HVDC) line in Armenian Ayrum, on the border with Georgia. Due to the to-be-built new substation and transmission line, Armenian and Georgian power grids will work in the same mode allowing electricity swaps.

Source: arka.am

 
April 27, 2016   World Bank Supports Improved Financial Standing and Governance in Armenia’s Energy Sector

The World Bank Board of Executive Directors approved today a US$30 million loan for the Power Sector Financial Recovery Program-for-Results (PforR) for Armenia. This Project will support the Government’s efforts to maintain adequate and reliable electricity supply by improving the financial condition and governance of the state-owned power generation companies and the private power distribution company.

Throughout the last five years, the state-owned generation companies have been experiencing a shortage of cash to finance key expenditures, because of lending and spending for purposes not related to their core business of generating and supplying energy. This is how the Armenian Nuclear Power Plant (ANPP) and Yerevan Thermal Power Pant (YTPC) have accumulated large cash deficits amounting to US$104 million which accounts to 80 percent of their total estimated revenues for 2015.

If the financial difficulties of the ANPP and YTPC are not overcome, it will have significant impact on their ability to maintain the current levels of generation with resulting negative consequences on the cost and adequacy of electricity supply in the country. In 2012-2014, those two plants accounted for 42 percent of total annual electricity generated for domestic needs. Inability of ANPP and YTPC to generate power at current levels could push up the average cost of electricity supply and possibly cause an electricity deficit.

“Improvement of the financial standing and governance of the state-owned power generation companies, and a better managed financial relationship with the private power distribution company is critical for maintaining adequate and reliable electricity supply at affordable tariffs, “ says Laura E. Bailey, World Bank Country Manager for Armenia. “The Government is committed to improving the financial governance of these companies, and has already undertaken a number of steps in that direction as reflected in the Program for Financial Recovery of the Power Sector.”

There are four results areas which this Program will achieve: elimination of cash outflows of state-owned power generation companies for non-core business related reasons; reduction of expensive commercial loans, recovery of receivables, and repayment of YTPC’s payable for natural gas; setting of tariffs reflecting changes in the cost of electricity supply, and maintaining the generation capacity of the gas turbine at YTPC’s Combined Cycle Gas Turbine (CCGT) plant.

Since the end of January 2016, the generation companies were able to start repaying the loans because of the recovery of receivables from Electricity Network of Armenia (ENA), the only company operating the power distribution network. The recovery of receivables from ENA will allow financing the backlog of expenditures for critical repairs and maintenance, however, additional cash injection is needed to help YTPC and ANPP as they regain their solid financial condition.

“The beneficiaries of the Program are all electricity consumers in Armenia along with the state-owned generation companies and the private power distributer. Financial health of ANPP and YTPC, as well as ENA, will ensure they have enough resources to spend on maintenance and finance some of the new investments required for reliable supply of electricity. Moreover, 140,000 businesses and other legal entities connected to the network will also benefit because the Program will help to fully meet their demand for electricity in a reliable manner,” says Arthur Kochnakyan, World Bank Task Team Leader of the Project.

In 2012-2014, ENA suffered a cumulative loss of around US$50 million due to revenue shortfall, accumulated for reasons not under its control (e.g. dry years in terms of hydrology, longer-than-planned recurrent repair of ANPP). In addition, the existing regulation did not allow Public Services Regulatory Commission (PSRC) to adjust ENA’s tariff margin to reflect the full amount of difference between the actual and forecast cost of purchased electricity in subsequent tariff period.

The tariff margin was revised in 2015 to compensate for those losses incurred during previous years. Going forward, PSRC will be revising the methodology to allow reflecting in ENA’s tariff margin the 100 percent of loss (profit) plus interest cost (profit) due to the above highlighted difference.

The World Bank will provide a US$30 million IBRD loan of variable spread with a 14.5-year grace period and the total repayment term of 25 years. Since joining the World Bank in 1992 and IDA in 1993, the total IDA and IBRD commitments to Armenia amount to around US$2.3 billion.

Source: worldbank.org

 
April 7, 2016   EBRD, EU to provide €11 million to Armenia for implementation of modern solid waste management solutions in provinces

The European Bank for Reconstruction and Development (EBRD) is providing €5.5 million loan to Armenia for implementation of modern solid waste management solutions in Kotayk and Gegharkunik regions, the bank's press office reported on Wednesday.

The loan amount consists of a previously signed €3.5 million and a newly added €2 million EBRD sovereign loan. The additional €2 million will enable the geographic coverage of the Kotayk Solid Waste Management Project to be extended to the adjacent Gegharkunik region. The project will finance the construction of Armenia’s first European Union (EU) compliant solid waste landfill, providing an integrated solid waste management solution in the Kotayk and Gegharkunik regions.

According to the press release, the new landfill will be located in the city of Hrazdan in Kotayk Province and managed by twelve participating municipalities – Hrazdan, Abovian, Charentsavan, Tsakhkadzor, Byureghavan, Yeghvard, Nor Hachn, Sevan, Martuni, Gavar, Vardenis and Chambarak. It will operate as a commercially sustainable unit with modern solid waste management systems, covering the collection and disposal of municipal solid waste. The provision of this service will generate major environmental and social benefits for some 500,000 people in the area.

This loan is generously complemented by capital grant financing of €5.5 million, consisting of a €3.5 million grant provided by the European Union Neighbourhood Investment Facility (EU NIF) and a €2.0 million grant secured from the Eastern Europe Energy Efficiency and Environment Partnership (E5P) fund.

The legal agreements for this loan were signed today in Yerevan by Armenia’s Minister of Finance, the twelve participating municipalities and the EBRD.

This project has received additional grant financing from several donors. The Austrian government will support the implementation of the project and the corporate development of the landfill management company. The remaining grant funds are contributed from the EBRD’s Shareholders’ Special Fund and the Early Transition Countries Fund.

«This development represents a significant step forward in implementing the Armenian government’s plans to modernise and upgrade the country’s waste management system to European standards,» the press release says. «It will serve as an example ofraising public awareness in the importance of sustainable solid waste management.»

“This investment will bring substantial benefits to the region’s residents and the environment, and will help to develop better public awareness of the benefits of recycling» Mark Davis, Head of the EBRD’s Yerevan Resident Office, is quoted inn the press release as saying. «We are grateful for the strong support from our donors for whom modernisation and environmental protection are a priority, as they are for us.”

Since the start of its operations in Armenia in 1992, the EBRD has invested over €1 billion in 148 projects in the country’s financial, corporate, infrastructure and energy sectors, with 87 per cent of investments being in the private sector.

Source: arka.am

 
March 10, 2016   Four companies pre-qualify for tender to choose single water distribution operator

Four companies have pre-qualified for participating in a tender that was announced by the Armenian government to choose a single operator for delivery of water supply services across the country, Volodya Narimanyan, deputy head of a nature protection ministry’s division overseeing water resources, said today.

The tender was announced on January 15, 2016 and its results are expected to be announced in the summer. The winner will get a 15-year license and is to launch operation from January 1, 2017.

The priority will be given to the company that will offer the lowest price for water. The current price for households in the capital city Yerevan is 170.256 drams per one cubic meter, Narimanyan said. The pre-qualified companies are French operators Saur and Veolie Generale des Eaux, the Armenian-German consortium A&G Service and the Italian ACEA.

French Saur is running the Armenian Water and Sewerage company, providing water services to seven regions of Armenia. Veolie Generale des Eaux is the operator of Yerevan-Jur, which is in charge of water supply in Yerevan and several adjacent communities. The A&G Service is the operator of water distribution system in Armavir, Shirak and Lori regions.

There are still 560 communities in the country which are not covered by any of the five Armenia-based water operators.

Source: arka.am

 
February 26, 2016   Construction of a hydro power plant Arax River may be launched very soon

Construction of a hydro power plant Arax River may be launched very soon, Armenian Deputy Energy and Natural Resources Minister Areg Galsyan said Thursday at a round-table discussion 'The South Caucasus' Eurasian Way – Integration for Development'.

«Construction of the Meghri Hydro Power Plant is a very good project,» he said. «Frankly speaking, work schedules set several years ago failed, and a 130-megawatt aggregate power was projected initially with annual output of 850 million kilowatt-hour.»

The plant foundation-laying ceremony took place on Arax River on November 8, 2012, and it was expected then that construction of the plant, which was estimated to cost $323 million, will be over by the beginning of 2016, but later some environmental problems prompted revision of the plant's capacity.

«Now we are already speaking about a 100-megawatt plant, and the diameter of the tunnel between two hydro power plants will be changed as well,» Galsyan said. In his words, design engineers are already completing their job. The financing will be fully borne by the Iranian side.

At the first period of the plant's operation, its entire output will be sent to Iran to return its investments, and after the repayment the generated power will be distributed among consumers in Armenia’s territory. In 2007, Armenian and Iranian governments signed an agreement to build and operate two power plants – in Meghri and Karachilar, which sit on Arax River's two banks.

Source: arka.am

 
February 18, 2016   Armenia to receive World Bank loan to repay power generating companies’ debts

The Armenian government will receive a loan from the World Bank under the program of financial recovery of energy system companies, energy and natural resources minister Yervand Zakharyan told a Cabinet session today.

He said the loan, repayable within 30 years will be provided with a 14-year grace period and 1.5% interest rate. The minister did not mention the total amount of the anticipated loan.

Zakharyan said part of the loan will be provided to the Electricity Networks of Armenia (ENA) to pay its debts to the Armenian NPP and the Yerevan TPP for supplied electricity, and another part will be used to pay loans borrowed by the Vanadzor chemical plant and Nairit synthetic rubber plant in Yerevan. He said given the terms of the loan, it will not affect the final tariff for the consumers.

Prime minister Hovik Abrahamyan noted that the government had considered all the issues in the energy sector and plans to rehabilitate the system. ‘We will be vigilant in order not to accumulate additional debt for n the system, he said.

Source: arka.am

 
February 11, 2016   Armenia to announce international tender to select contractor for building 400 Kv electricity transmission line to Georgia

Armenia’s energy and natural resources ministry said today it will soon announce an international tender to select a contractor for building the fourth 400 kV electricity transmission line to Georgia.

The total cost of this project, implemented with the support of German state-owned KfW bank is estimated at 326.9 million euros. Some 10% of the money will be provided by the Georgian side.

The ministry said in a press release that the tender package is being developed by Fichtner GmbH & Co. KG advisory firm, which is also conducting a study to assess the environmental and social impacts of the project.

The Armenian ministry said also the planned work is being carried out according to the schedule and is expected to be completed by the end of this year, to be followed by the launch of construction work that in turn is to be over before the end of 2018.

The project will be implemented in five phases. New transformer stations and several sections of high voltage power lines will be built to increase the total capacity of the facility to 1050 MW.

The cost of the first two phases is estimated at about 188.2 million euros. Some 168 million euros will be provided by KfW bank with which three loan agreements had been signed. Another agreement to the tune of 10 million euros was signed with the European Investment Bank. In addition, the European Commission pledged a 10 million euro grant.

The project’s goal is to unite Armenian and Georgian energy systems to stimulate mutually beneficial regional cooperation between Russia, Georgia, Armenia and Iran, as well as create preconditions for synchronizing the power system of the CIS countries.

Source: arka.am

 
February 4, 2016   Armenian government approves signing of memorandum on construction of new thermal power plant

The Armenian government on Thursday approved the signing of a memorandum on the construction of a new thermal power plant near the third-largest town of Vanadzor with a combined gas and steam cycle capacity of 234 MW. The memorandum will be signed between the ministry of energy and natural resources and Grange Power LLC.

Energy and natural resources minister Yervand Zakharyan said about $220 million is to be invested in this project. He said the agreement is expected to be signed within four months to be followed by the launch of the construction, which is to be completed within 30 months.

Earlier it was reported that the Armenian government would help Grange Power LLC to acquire a land plot for the power plant. The company undertakes to use its own means to build a thermal power plant within 30 months, while the government of Armenia pledged to ensure the supply of gas for a period of not less than 20 years.

The government is supposed to guarantees the purchase of all the electricity to be produced by the new power plant at a cost of 6.62 per 1 kWh (not counting VAT and other taxes).

Source: arka.am

 
February 4, 2016   Construction of another section of North-South transport corridor to kick off later this year

The construction of another section of the North-South transport corridor will kick off later this year, deputy transport and communications minister Artur Arakelyan said today.

He said the parliament has already approved an agreement with the Eurasian Development Bank (EDB) that will provide a loan to the tune of $150 million for the construction of a 21 km-long section stretching from Agarak to Kajaran in the southern province of Syunik.

The first two sections of the transport corridor were inaugurated on December 29 last year. The first, six-lane section stretches from Yerevan to Artashat and the second four-lane section runs from Yerevan to Ashtarak. Both have a 100-110 km/h speed limit and make up a total length of 31 km.

The goal of North-South Transport Corridor project is to upgrade Armenia’s main corridor road as part of a broader thrust to improve connectivity, and boost trade, growth and livelihood opportunities in the Caucasus and Central Asia sub-regions.

Funds are being released by the Asian Development Bank and the Eurasian Development Bank periodically through multi-tranche financing facilities. The transport corridor will stretch from the southern Armenian town of Meghri, on the border with Iran, to Bavra in the north on the border with Georgia. The North-South transport corridor will enable Armenia to mitigate the effects of the blockade imposed by Azerbaijan and Turkey.

Currently the construction of the road is underway from Artashat to Ashtarak and from Ashtarak to Talin. The ministry of transport and communications plans also the implementation of separate smaller projects at various sections of the road in order to end the construction both in southern and northern directions by 2019.

Source: arka.am

 
February 1, 2016   EIB supports with EUR 51m upgrade of strategic transport infrastructure in Armenia

The European Investment Bank (EIB) is lending EUR 51 million to the Republic of Armenia to finance rehabilitation of the M6 interstate road, the crucial transport corridor in Armenia representing the interconnection of the country with Georgia and thus the EU and being significant particularly for Armenia’s exports and imports.

The EIB funds will support the rehabilitation and upgrading along some 90 km of the M6 road between Vanadzor in central Armenia and Bagratashen at the North eastern border between Armenia and Georgia. The road follows a deep valley and features several hairpin bends, steep inclines, narrow bridges and three tunnels which will be upgraded. The M6 rehabilitation will help to improve traffic fluidity, levels of service, time savings and increase overall road safety, expected to result in a reduced number of road accidents, injuries and fatalities.

EIB Vice-President László Baranyay, responsible for EIB operations in Armenia commented: “The EIB loan will support the upgrade of Armenia’s priority M6 road infrastructure representing connection of Yerevan with Tbilisi. This transport infrastructure serves as major link of Armenia with Europe and other countries of the Commonwealth of Independent States through Georgia’s Black Sea ports carrying over 60% of Armenia’s international traffic”.

In addition to EIB, the Asian Development Bank is expected to provide support to the project. The total costs of the project that will be promoted by the Ministry of Transport and Communication is EUR 102 million.

Currently, the EIB lending commitment in Armenia covers twelve projects, most of them supported by EU grants, and amounts to some EUR 270 million. It supports a well-diversified investment portfolio important for the country’s development in the areas of transport, energy, water and solid waste sector infrastructure and indirectly financing the undertakings of small and medium-sized enterprises (SMEs) through EIB partner financing institutions. Both parties have ongoing discussions regarding the future priorities of EIB activities in Armenia and the promising pipeline of new operations for the upcoming years.

Source: armradio.am

 
January 27, 2016   French Development Agency provides Armenia with 75 million euro loan for restoration of Vedi reservoir

The French Development Agency has provided Armenia with a 75 million euro loan for the restoration of Vedi reservoir, the press service of the ministry of finance said.

The loan agreement was signed on Tuesday by Armenian finance minister Gagik Khachatryan, deputy director of the French Development Agency for Asia Jean-Claude Pires and French ambassador to Armenia Jean-François Charpentier.

The loan is to be repaid within 20 years. It is provided with a six-year grace period and at an interest rate that can not be higher than 6.25% and less than 0.25%.

"The signing of the agreement is an important step for the development of Armenian agriculture, which will also be an incentive in the context of employment," Gagik Khachatryan said.

According to the French ambassador, the project when completed will alleviate the problem of water shortage in the Ararat Valley and allow the transition from mechanical to the gravity irrigation system, which, in turn, will result in saving of electricity.

Earlier Armenian prime minister Hovik Abrahamyan said the government included the rehabilitation and construction of water reservoirs in the list of its priorities. He ordered all relevant bodies to ensure that the rehabilitation of Vedi reservoir start in January or February.

Source: arka.am

 
January 18, 2016   Armenia’s State Water Committee announces tender to choose drinking water supplier

Armenia’s State Water Committee has announced a tender to choose a drinking water supplier, the committee’s press office reported on Friday. According to the report, the Armenian government has already embarked on second-generation reforms in drinking water economy and has already taken some steps to make ties between public and private sectors closer in the territories serviced by Yerevan Jur, Armenian Water and Sewerage Company, Lori Water and Sewerage, Shirak Water and Sewerage Company and Nor Akunk.

The aim of the reforms is to improve the quality of water supply services and management of water resources and to enhance financial sustainability of the water economy. In accordance with the government’s decision, one operator will be chosen in the tender and all the mentioned companies will be handed over to the winner of the tender for a 15-year management.

Prices for water supply and sewerage will be single in the entire territory of the country. Fichtner (Germany), Ramboll (Denmark) and Accounting & Audit Reform Consultants (AARC Ltd) (Ireland) consulting companies will provide assistance in organization of the tender.

The deadline for supplying pre-qualification applications is January 21, 2016. At the pre-qualification round, a short list of the companies eligible to compete in the tender will be composed. The tender will be conducted in March 2016.

Source: arka.am

 
January 16, 2016   Development of regional energy system is one of government’s priority projects

Armenia will continue the projects with Iran and Georgia over the development of the regional energy system. Particularly construction of Armenia-Georgia 400 kV overhead power line will significantly promote the development of mutually beneficial cooperation. The construction of Armenia-Georgia 400 kV overhead power line is aimed at ensuring Armenia’s implementation of commitments towards gas-electricity project as well as at development of regional collaboration. As “Armenpress” reports, the implementation of the works is involved in the priority projects of the Armenian Republic’s government which was confirmed in the session of January 14.

 The purpose of the construction of new transmission lines is to ensure stable works with the energy systems of Iran and Georgia aiming at providing the work of three energy systems together in parallel regime. The quality of the service will be noticeably improved by the construction of new transmission lines; development of regional mutually beneficial cooperation in energy sector will be significantly promoted as well as a precondition will be created  for organizing parallel work with the energy system of CIS countries.

Source: armenpress.am

 
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