The EBRD is providing a loan of up to €42 million to the electricity distribution company Electric Networks of Armenia to promote energy efficiency throughout the Caucasus republic. The project is supported with €200,000 in technical assistance from Spain.
The project will also be co-financed by Russia’s Vnesheconombank which will provide €22.5 million to Electric Networks of Armenia under an agreement signed today. The EBRD and Vnesheconombank signed an intercreditor agreement. Both banks are joining forces in a third country for the first time and the cooperation is seen as a milestone in regional cooperation.
The loan to Electric Networks of Armenia will finance energy efficiency measures including an upgrade and modernisation of the low-voltage infrastructure to reduce losses and the installation of meters to improve the quality of supply.
These measures will increase the overall efficiency of the power distribution system in Armenia, reduce network losses and improve the quality of power supply through better frequency control and reduction of power outages significantly.
Electric Networks of Armenia is owned by InterRAO UES of Russia. It is the single supplier of electricity in the country. Third party access to the distribution network is to be introduced by 2013.
Nandita Parshad, EBRD Director for Power and Energy, said “This project provides us with an excellent opportunity to demonstrate what can be achieved with improvements in energy efficiency. Reduced losses and improved quality will benefit both the distribution company as well as the consumer, be it businesses or private households. We expect the successful implementation of the modernisation programme to have a demonstration effect for the wider region.”
Evgeniy Gladunchik, Chief Executive Officer of Electric Networks of Armenia, added “This is the largest loan the EBRD has ever provided to an Armenian company without a sovereign guarantee. It will help ENA significantly to improve our operating and financial performance”.
The EBRD has made the promotion of energy efficiency one of its core activities. Under its Sustainable Energy Initiative I (SEI), started in 2006, the Bank has financed over €2.7 billion in 166 projects yielding 21 million tonnes of CO2 reductions. Building on the success of the initiative the EBRD is now launching its Sustainable Energy Initiative II.
The EBRD, owned by 61 countries and two intergovernmental institutions, is supporting the development of market economies and democracies in countries from central Europe to central Asia. For further information, visit: www.ebrd.com