Armenia’s recent political developments aren’t the only power shifts electrifying the national capital, Yerevan.
When the country’s 250 megawatt (MW) combined-cycle gas-fired thermal power facility in the south of Yerevan starts operating in 2021, it will help replace electricity produced by aging gas-fired power plants. Because the plant will be about 50 percent more efficient than old facilities, it is expected to reduce imported gas cost by around 25 million US dollars per year while improving the reliability and security of the energy supply. It will also help reduce the greenhouse emissions per unit of electricity generated. It is expected to be the cheapest privately owned thermal power generator in the country, with the highest efficiency.
The project, supported by the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), is being developed by a consortium comprising German Siemens Project Ventures (part of Siemens Financial Services), Italian Renco Spa, and SIMEST Spa (CDP Group), an Italian development finance institution, through a special purpose company, ArmPower CJSC. The company will sell its generation output to Electric Networks of Armenia (ENA), which distributes and sells electric energy in the country.
IFC and MIGA have arranged a landmark 202 million-US dollar debt finance and guarantee package to back the initiative. Support includes a 42 million-US dollar loan for IFC’s own account, and 121 million US dollars from IFC’s innovative syndications platform, the Managed Co-Lending Portfolio Programme (MCPP). It also includes parallel loans from the Asian Development Bank, the OPEC Fund for International Development, and the German development finance institution DEG – Deutsche Investitions- und Entwicklungsgesellschaft. MIGA is providing a guarantee of up to 39 million US dollars to help Renco Spa manage non-commercial risks.
Two-thirds of electricity in Armenia is generated from imported fuel. Armenia’s new plant will help increase efficiency for gas-fired electricity generation, producing up to 2,000 gigawatts per hour (GWh) and ensuring a reliable power supply.
The new plant is key to helping Armenia’s government achieve its goals for the energy sector, which include rehabilitation of power transmission and distribution assets, promotion of energy efficiency investments, and construction of new generation capacity. Together, these elements will ensure the continuation of an adequate electricity supply for Armenia’s three million people.