Armenia Receives Grants for Renewable Energy Project

Grants and credits totaling US$50 million will assist the Armenian government to increase privately owned and operated power generation using renewable energy and to reduce greenhouse gas (carbon dioxide) emissions by overcoming barriers to the development of renewable energy.

The World Bank approved a Renewable Energy Project for Armenia totaling US$25 million, including a US$5 million International Development Association (IDA) credit, and a US$3 million grant from the Global Environment Facility (GEF). The project will also be supported by co-financing of US$7 million from EBRD, US$3 million from the Cafesjian Family Foundation, and US$7 million from the government and local financial institutions. Armenia has achieved remarkable results in reforming the power sector and improving its financial performance in this energy crisis. The remaining challenge for the sector is to ensure sustainable and reliable power supply by shifting reliance from costly and polluting sources of energy to lower cost and environmentally friendly alternatives; and increasing the energy diversification for a higher degree of energy security through indigenous renewable energy resources. While the overall legal and regulatory framework in Armenia is supportive to the development of renewable resources, private investments in renewable projects are impeded by a number of legal, regulatory, informational, financial and institutional barriers. The Renewable Energy Project will provide assistance to remove the existing barriers and debt financing, as well as technical, legal, managerial and business support to a selected number of renewable projects. By the time of completion, the project is expected to contribute to the development of about 80 MW of additional renewable energy generation capacity, adding 200 gigawatt hour (GWh) annual renewable generation to the electricity generation mix. In addition, carbon dioxide emissions are expected to be lowered by around 130,000 tons annually. The Credit will be made to Armenia on standard IDA terms, including 40 years maturity and a 10-year grace period. Since joining the World Bank in 1992 and IDA in 1993, the commitments to Armenia total approximately US$921 million for 42 operations, stated the release.
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