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EBRD lends support to Electric Networks of Armenia

By Loretta  Martikian

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  • US$ 70 million loan to support the modernisation of Armenia’s power supply network
  • Measures to address environmental priorities in the two largest cities of Yerevan and Gyumri
  • Large-scale digitalisation of the electricity metering system to enhance network reliability

The European Bank for Reconstruction and Development (EBRD) is providing a loan of US$ 70 million, including a B-loan from the Netherlands Development Finance Company (FMO), to Electric Networks of Armenia (ENA), the country’s sole electricity distribution company and long-standing client of the Bank. The funding will support the large-scale modernisation of the power distribution network in Armenia.

The Asian Development Bank (ADB) is co-financing this project with a US$ 35 million loan.

The loan aims to strengthen ENA’s distribution infrastructure, with a focus on the regions as well as the country’s two largest cities, Yerevan and Gyumri, both of which are part of the EBRD Green Cities programme. ENA will address specific environmental priorities identified in the Cities’ Green City Action Plans (GCAPs), such as the reduction of greenhouse gas (GHG) emissions and the integration of renewables into the power system. The financing will support Armenia’s digital transition through the large-scale implementation of automatic control and smart metering systems, enhancing the power network’s reliability and flexibility and significantly improving systems performance. The digital economy is one of the pillars of the EBRD’s Strategic and Capital Framework.

The project is expected to improve energy efficiency, reduce technical and commercial losses and GHG emissions and remove technical barriers to the installation of small and medium-sized renewable projects (especially solar and wind), thus improving the overall reliability of the country’s power supply and helping both Yerevan and Gyumri to meet their climate goals. 

ENA is owned by Tashir Group, a large, diversified group of industrial and construction companies.

Nandita Parshad, EBRD Managing Director, Sustainable Infrastructure Group, said: “This is an important milestone for the development of a stable and reliable power system in Armenia and a model for private grid operators in other countries. ENA will become a strategic platform for scaling up renewables, thus supporting its 2021-30 Nationally Determined Contributions and its greenhouse gas emissions reduction targets under the Paris Agreement”

Dimitri Gvindadze, EBRD Head of Armenia, said: “This multi-stage energy infrastructure modernisation project includes several key elements – system digitalisation, improved energy efficiency and reliability of supply. The project is important in the context of the EBRD's work to develop Armenia's clean energy generation capacity, including utility-scale solar power generation.”

“The effective implementation this investment program is aimed at further enhancing the quality of our customer service, a priority for Electric Networks of Armenia. We are pleased to be working with the Asian Development Bank and the European Bank for Reconstruction and Development on the second phase of this program," said ENA General Director Karen Harutyunyan.

The EBRD has been working together with ENA for over a decade and has committed more than US$ 100 million to supporting the company. The funds have been crucial in financing energy-efficiency measures, including the upgrade and modernisation of low-voltage infrastructure to reduce network losses and the installation of meters to improve the quality of supply.

The EBRD is the leading institutional investor in Armenia, active in all sectors of the economy. Since the start of its operations in the country in 1992, the Bank has invested €1.56 billion in 191 projects in its financial, corporate, infrastructure and energy sectors, with 91 per cent of investments going to the private sector.

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