Armenia will receive €23.208 million from KfW, Germany’s Development Bank, in grants for eight years for protection of environment. The signing of an appropriate agreement was approved Thursday at the Armenian government’s regular meeting. The program will protect natural resources in the areas with rich bio diversity.
Erik Grigoryan, Armenian acting environment minister, said that the German partners will provide a €13-million grant to Armenia for protection of forests and bio variety. This is one of the biggest environmental grants of this bank in the world and the biggest grant in the region and also in Armenia’s history. “The program is not limited to bio diversity and forests – it includes also social and economic development projects as well as eco tourism development projects,” he said.
In his words, many similar programs are being implemented in the southern part of Armenia also under Germany’s support. ”The programs can not only touch social area or environment, but to ease social and economic tension,” Grigoryan said. “We are implementing not only environmental programs, but also farming and community programs, which make it possible to increase communities’ income and pressure on environment.”
Acting Prime Minister Nikol Pashinyan, on his side, put special emphasis on social and economic component of the program. ”For example, the programs we are implementing in Tavush province contain also this component,” he said. “In particular, support is provided to citizens in different provinces to deter them from cutting forests to earn money. Support is provided to them also in terms of entrepreneurship, to encourage them to have their income by establishing, for example, eco tourism facilities.”
Pashinyan said that Armenia today is one of the world’s areas with rich bio diversity, which is still under threat now because of social and economic problems. He said that not only administrative resource should be used to protect environment, but it also necessary to give people a chance to earn money, if particular environmental matters are settled.
”The Armenian government is periodically make particular efforts to protect environment, for example, it imposes season restrictions on fishing in Lake Sevan and protect forests, and very often its steps are treated wrongly by residents,” Pashinyan said. “First of all, all this is being done for the sake of the residents of the area. It is necessary to understand their state and to try to solve the problems not by using administrative levers, but through a simple and direct dialogue.” Pashinyan also said that a right management of bio variety will bring several times larger income than the cutting of forests. He said this strategy should be developed.
An agreement is signed to build a new gas-vapor cycle unit for Yerevan Thermal Power Plant, Garegin Baghramyan, Armenian acting energy infrastructures and natural resources minister, said Tuesday at a news conference.
In his words, the construction is estimated to cost $250 million, and the price for the electric power generated by the plant will be lower than that generated by other thermal power plants. The government started negotiating over the matter yet in 2017, but the final agreement was signed just today.
“The long-term negotiation has resulted in the agreement and the arrangement that the electric power generated by the thermal power plant will be driven down from 6.02 cents to 5.7 cents,” Baghramyan said. “We have managed to save $6.4 million a year from the implementation of the project, and this amounts to $160 million for 25 years.”
In fact, he said, the electric power will cost AMD 27.4, and this is already four drams less than the present price for the electric power produced by Hrazdan Thermal Power Plant (31.5 drams) and even the Yerevan Thermal Power Plant (29.4 drams). Baghramyan said that the lowered price for the electric power will drive retail power price down, since wholesale supply will become cheaper as well.
He said that quite new and high-professional technologies will be applied at the plant. “Financial matters will be settled within two months, and the construction of the unit will take some 26 months, after which 200-250 employees with quite high salaries will work here,” he said. “The new plant will be built near the old Yerevan Thermal Power Plant.”
Baghramyan said that the old 400-megawatt unit is planed to stop operating in 2019 or 2020. He also said that demand for electric power is expected to be growing in the country, given the construction of 110-megawatt mining farms, the program with Iran “Gas for Electricity” and the construction of the third Armenia-Iran electric power line.
Giovanni Rubini, Chief Executive Officer at RENCO SPA, on his side, said that the project will be implemented jointly with Siemens Company, which will receive 40% of the shares of the new 250-megawatt unit, while the remaining 60% will belong to RENCO and an Italian state-owned company. The plant is estimated to operate for 25 years.
Rubini said this is a very important project for Armenia and for the company itself, since for the first time over 20 years of its activity in the country it engages in its direct business – construction of power-generating units and generation of electricity.
Garegin Baghramyan, the acting minister of infrastructures and natural resources of Armenia met Monday with a KfW development bank delegation headed by Thomas Eisenbach, the head of energy department of the German bank. The press office of the ministry reports that the implementation of the bank’s programs in Armenia’s energy sector, particularly the construction of the Caucasus Power Lines and the Stable Current Transformer, were discussed at the meeting.
Further cooperation prospects were discussed at the meeting as well. The Caucasus Power Lines program is estimated to cost €320 million. The program will be implemented in three stages, the first of which kicked off in 2014 and will last until 2018, the second stage will last up to 2021 and the third to 2026.
The first stage implies construction of a high-voltage line between Armenia and Georgia, and this will allow increasing the current 200-megawatt capacity to 700 MW thanks to the 400-kilowatt high-voltage constant current line that is being built now.
The first stage of the program is estimated to cost €107 million, of which €85 million will be provided by KfW, €10 million will be received from the European Union as grant and another €10 million will be lent by the European Investment Bank for 25-28 years at the average annual interest rate of 0.5%. In December 2014, Armenia and KfW signed a loan agreement of €85.2 million for implementation of the Caucasus Power Lines project.
The money is being provided in two tranches - €75 million and €10.2 million – at a fixed interest rate which will be decided at the moment of the signing of the agreement. The first loan is provided for 15 years with a five-year grace period, and the second for 40 years at a 0.75% rate with preferential terms.
The aim of the program is connection of Armenian and Georgian energy systems. On the Armenian side, the connection will be carried out via the 400-kilowatt Hrazdan Substation, and in Georgia’s territory through the 500-kilowatt Marneuli Substation.
Mr. Garegin Baghramyan, Minister of Energy Infrastructures and Natural Resources of the Republic of Armenia has received the representatives of the Energy Investment Holding CJSC on October 20, 2018. The company representatives have presented to the Minister the progress of the Shnogh hydro power plant’s (HPP) Feasibility Study along with the Holding’s current investment programs.
The Feasibility Study of the Shnogh HPP is being conducted by the Poyry Swtizeland LLC under the monitoring of a US-based The Robbins Company and under the technical oversight of the specialists of an Austia-based ILF Company which was awared this project by the International Finance Corporation, a member of the World Bank Group based on the results of the international tender.
During the first phase of the works which will be over by October 31, 2018 the route of the power waterway tunnel and the installed capacity of the HPP will be determined. During the next phases of the project, the physical-mechanical characteristics of the soils will be studied, the envonmental and social impact of the project will be assessed, the environmental risks will be identified, and a detailed roadmap for mitigating these risks will be developed.
Thereafter, the project will undergo an environmental assessment, and public hearings with the communities involved, environmentalists, and NGOs representatives will be held. When speaking about the importance of the project for the energy security of Armenia, the Minster has specifically stressed that the construction permit for Shnogh HPP will be issued only after a clear program of environmental risks mitigation is in place and only after this program receives the approval of the communities involved.
The Shnogh HPP investment program will be worth 150-180 million of US dollars. Over 1,200 highly-paid jobs will be created during the construction period, the hydro power plant will generate 7% of Armenia’s internal consumption of the electricity. Along with the Shnogh HPP program, the Constuction of the training center for re-qualifying mid-level specialists of the energy sector and Modernization of small HPPs investment programs were presented to the Minister.
The purpose behind the 6 million US dollar-worth training center is the re-qualification of specilists currently working in the energy sector. This will enable hundreds of specialists to adapt to the new job market conditions and requirements, as well as to staff the energy companies with the qualified specialists. The small HPPs’ modernization program in light of their compliance to current environmental standards and requirements was also discussed. The purpose of the program lies in the most efficient use of water resources, the improvement of the environmental condition of the rivers, and mitigation of environmental impacts. The preliminary value of the 5-year program comprises around 120 million US dollars.
As a result, 20-25 currently operating small HPPs will be equipped with modern technological equipment and will adhere to modern envorinmnetal standards and criteria. Thus, the efficiency of these HPPs will be increased and the environmental situation will be improved.
The Armenian environment ministry’s water committee signed Thursday an agreement with Artois Picardie Water Agency to receive technical support for managing water resources. The aim of the agreement is to create mechanisms for strengthening institutional technical cooperation in water resources management and an effective use of technical means.
“We are happy to sign the agreement, taking into account the experience of France in water resources management,” said Armenian Acting Nature Protection Minister Erik Grigoryan. French Ambassador to Armenia Jonathan Lacote, on his side, said that the agreement gives room for more expanded cooperation, not only with Veolia, a French company supplying water in Yerevan, but also with another company - Artois Picardie.
He said that the agreement lays groundwork for joint management and monitoring of environmental norms observation in Ararat and Armavir provinces. In his words, the document may serve as basis for investment of about €75 million in effective use of water resources in house holding and farming.
The Armenian-French agreement was signed as part of the European Union Water Initiative plus for Eastern Partnership countries (EUWI+). Veolia Jur, a subsidiary of France’s Veolia Generale des Eaux, is the sole water and sewerage operator in Yerevan and some provinces.
Armenian Energy Infrastructures and Natural Resources Minister Arthur Grigoryan received Monday Executive Director at Access Company Vahid Fotuhi, the ministry’s press office reports. Prospects for wind energy development were discussed at the meeting.
Stressing the importance of construction of wind stations in Armenia, Grigoryan expressed willingness to discuss proposals and projects which can give a new impetus to the implementation of the program.
The parties discussed the program of construction by the Access Infra Central Asia Limited of a 130-megawatt electric power plant in Gegharkunik province. Fotuhi said that Access Company is ready to invest $200 million in construction of wind power plants in Armenia’s other provinces.
Grigoryan, on his side, said that necessary groundwork is laid for mutually beneficial cooperation and favorable environment is created for making successful investments in Armenia.
The Armenian Government has approved the construction of the 55MW Masrik-1 solar power plant, the World Bank Armenia Office reported. It said for this project, the government has issued the letter of award to a consortium comprising Fotowatio Renewable Venture (FRV) and FSL Solar. Masrik-1 is reported to be the first competitively tendered independent power project (IPP) in the country.
In 2014, the Armenian Government has recognized the importance of the utility-scale solar photovoltaic (PV) under the scaling-up renewable energy program investment plan (SREP), which offered a project preparation grant of $2m.
The SREP and the World Bank team supported the renewable resources and energy-efficiency fund. This financing was offered with the installation of ground-based solar resource measurements; the identification of Masrik-1 as the candidate site for the first round of tender; and the commissioning of feasibility studies, and environmental and social impact assessments.
SREP and the World Bank also provided a guarantee instrument to mitigate investment risks, attract international developers and increase competition. World Bank Armenia country manager Sylvie Bossoutrot said: “The Masrik-1 solar power plant is a pioneering project for Armenia, as well as for the South Caucasus region, and an exciting opportunity for the country to further develop its renewable energy potential.
“Furthermore, the open and competitive bidding process carried out by the government has set an example for future investments in the country.” During its 20-year lifespan, the power plant is expected to reduce nearly one million tons of carbon, as well as create short-term and long-term jobs in the region.
The project is also expected to improve long-term energy security in the country by promoting the development of solar resources. The country’s dependency on imported natural gas will also be reduced. SREP and the World Bank have also identified another five potential solar projects with a total capacity of 55MW in the region that will be launched in a second round of competitive bidding in the near future.
Under the auspices of the International Bank for Reconstruction and Development (EBRD) within the framework of improving the power transmission network, Yerevan Thermal Power Plant CJSC implements reconstruction of Yerevan Thermal Power Plant substation.
The goal of the project is to reconstruct the Yerevan Thermal Power Plant substation, which are being operated for 30 years and more. Substation reconstruction will contribute to the reduction of the frequency of failure of the 220/110/35 kV substation of the Yerevan Thermal Power Plant. The recovery will result in increase safety and reliability of the substation and power system.
Currently the constructions are underway, products and basic equipments are imported. Specifically, the 200 MVA autotransformer, 2 pcs 27.5 Mw transformers, 220 kV and 110 kV portals, switches, dividers were imported.
According to Vardan Martirosyan, Head of the Department of Credit and Grant Projects at the RA Ministry of Energy Infrastructures and Natural Resources, most of the remaining equipment is on the road or ready for shipment. Works on the foundation, landing contour and drainage system are being completed. The constructions of basic management and 35 kV substation buildings are in process.
At the same time, the installation of imported portals, the assembly and mounting of metal structures of equipment are also being implemented.
In 2015, the Republic of Armenia and the International Bank for Reconstruction and Development (EBRD) signed a grant agreement, with the launch of an industrial Utility-Scale Solar Power Project.
Three years later, on March 27, 2018, the Project recorded important outcomes of extensive work carried out during those years. During the tender arranged for “Masrik-1”- 55 MW capacity solar PV plant, the Financial Proposals of the Pre-Qualified Companies were opened and the name of the investor that offered the lowest electricity tariff was announced. The lowest tariff was proposed by the Consortium comprised of the leading international companies: Fotowatio Renewable Ventures B.V, Netherlands (Lead Sponsor)- FSL Solar S.L., Spain (Anchor Sponsor). The proposed tariff is 0.0419 USD excluding VAT (20.11 AMD). For comparison, the current tariff for small hydropower plants on the natural flows/streams in Armenia is 23.8 AMD.
The final results indicate that the Solar PV development today in Armenia may compete successfully with other branches of the energy sector, has a higher weight in the energy balance of the country and may boost progress in energy security and independence of Armenia.
“Masrik-1” Solar PV plant is planned to be constructed in Mets Masrik community of Gegharkunik province, with the involvement of foreign investments. There are all the necessary preconditions for the construction of a modern powerful PV plant in the area selected for the plant. It will generate up to 120 million kW/h electricity annually. The expected investment amount is about $ 50 million.
The tender for “Masrik-1” Project was launched in the scope of the “Energy Week” held in Yerevan, in February 2017. More than 50 foreign companies took part in the traditional “Energy Week” event. The high interest of the investors was also confirmed at the pre-qualification stage of the Project. More than seventy companies from Europe, the United States, China, India, South Africa and other countries procured bids. Twenty companies submitted bids, ten of which passed the pre-qualification stage and were allowed to participate in the Tender and submit their tariffs.
It is worth to add, that the efforts of the Government of the RoA, the Ministry of Energy Infrastructures and Natural Resources of the RoA, the Public Services Regulatory Commission, Armenia Renewable Resources and Energy Efficiency Fund and its Consultants, as well as activities carried out directly with the World Bank support, included not only “Masrik-1” Utility-Scale Solar PV Project promotion, but also assessment of the solar potential of Armenia and elaboration of precise solar maps developed by the international advisory company, selection of six sites for the construction of large solar plants with a total capacity of 120 MW, preparation of bidding documents required for the organization of the Tender for Investors, including implementation of feasibility studies.
The European Bank for Reconstruction and Development will finance two large-scale projects in Armenia, the press office of the Armenian Water Committee reported on Monday. According to the press release, Arsen Harutyunyan, chairman of the committee, and Dimitri Gvindadze, the newly appointed head of the EBRD office in Yerevan, discussed details at their meeting.
Prospects for cooperation in other programs were discussed at the meeting as well. Harutyunyan said that the water committee is implementing a number of programs under the EBRD support, two of which are already completed.
“One of them is a program for Armenia’s small communities – it has been implemented also by using the EBRD-lent money,” he said. “Thanks to this program, water supply has been improved in Tavush, Lori, Shirak, Kotayk, Syunik and Vayots Dzor provinces and sewerage facilities have been built in Tavush and Vayots Dzor.”
Harutyunyan said that the implementation of other two programs is under way now. One of these programs targets provinces and the other one Yerevan. An €80-million investment program implies reconstruction and modernization of water supply and sewerage infrastructures in the 126 communities in nine provinces which are badly in need of such improvements. The EBRD will provide a €30-million loan for this program.
The program designed for Yerevan implies replacement of already dilapidated water supply facilities, such as pipes and pumps, with new ones. The program is estimated to cost $21 million, of which $7 million will come from the EBRD. Gvindadze expressed hope for success and visible results..
The results of the tender announced for choosing a builder of a photo voltage solar power plant in Armenia will be known in spring 2018, Hayk Harutyunyan, deputy energy infrastructures and natural resources minister, said Wednesday at a pre-tender conference. The project implies construction of Masrik-1, a 45-to-55-megawatt photo voltage solar plant.
“As many as 20 companies from all over the world have applied for participation in the tender, but only 10 of them and one consortium have passed the pre-qualifying stage,” Harutyunyan said. “Very tight requirements have been put up to contenders at the pre-qualification stage, and therefore few could be able to continue racing for the right to build and run the plant.”
The following Dutch, American, Korean, German and other companies have reached the second round: TBEA Xinjiang Sunoasis Co., Ltd, China –Subsolar Energy Holding LLC, the Netherlands, Phelan Energy Group Limited, South Africa –Korea Electric Power Corporation, Shapoorji Pallonji Infrastructure Capital Company Private Limited, India – Risen Energy Co. Limited, China, Metka, Greece –Energy Phoenix, Lebanon, Access Infra Central Asia Limited, U.A.E – Eren Renewable Energy S.A., France – TSK Electronica, Spain, Fotowatio Renewable Ventures B.V, Netherlands, –FSL Solar S.L., Country: Spain, Acciona Energia S.A.U., Spain, Building Energy Development Africa, Italy –H1 Holdings (Pty) Ltd, South Africa, Sky Power Global and Cayman –Enerparc Projects GMBH, Germany, CountourGlobal LP, Cayman Islands.
The deputy minister said that the construction of the first photo voltage solar plant is expected to be launched already this year and that the plant will be commissioned no later than in 2020. Harutyunyan also said that prices for electric power were among selection criteria in the tender.
“We expected from applicants a record low price, a price lower than that of thermal plants and comparable to that of hydro power plants to down also the price for final consumer. As for the cost of the project, it may be $40 to 60 million, according to preliminary estimation.
In accordance with the investment program, an average price calculated for operation of Masrik-1 photo voltage solar plant for 25 years is 6.39m cents per one KWt/h, including VAT. A $58-million investment program aimed at renewable energy development was launched in Armenia in summer 2015.
The program is designed for five or six years and is being implemented by the Renewable Energy Fund with support from Climate Investment Funds, the Armenian energy and natural resources ministry, the World Bank and the Asian Development Bank. (1$ - AMD 480.63).