A US$ 29.8 million (ECU 21.5 million) loan to the Republic of Armenia to complete construction of a 300MW gas-fired power generating unit at the Hrasdan thermal power plant (Unit No 5) and to privatise it upon completion.
The main objectives of the project are to: (i) complete construction of Hrasdan Unit No.5; and (ii) privatise the Unit upon completion.
The proposed project will significantly increase the efficiency of energy use in Armenia by providing the country with a new generating unit significantly more efficient than the existing ones. It will also facilitate early decommissioning of the Medzamor nuclear power station, and strongly support the Government's effort to restructure its energy sector along more commercial lines by encouraging private investment in thermal generation.
Republic of Armenia
Of the total financing requirement of US$ 120.4 million (ECU 86.9 million) to complete the plant, the EBRD will provide US$ 6.7 million (ECU 4.8 million) under its existing loan and an additional US$ 29.8 million (ECU 21.5 million) under a new loan facility. The balance is expected to be financed by the Export-Import Bank of Japan, technical cooperation funds and the Government of Armenia.
US$ 120.4 million (ECU 86.9 million).
The project was screened as B/1, requiring an environmental analysis and an environmental audit. These were undertaken by international consultants in 1992 and reviewed by the EBRD's environmental specialists.
Source performance limits guaranteed by the boiler manufacturer are 200 mg/Nm³ for NOx, which is below the European Union emission standard of 350 mg/Nm³ for gas-fired power units. Special permission will be obtained from the Armenian Ministry of Environmental Protection for burning heavy fuel oil.
Mitigation measures identified during the environmental investigations cover air emissions, water discharge, oil and chemicals storage, health and safety procedures and emergency response plans. Implementation of the mitigation measures will be covenanted under the project loan agreement. The client will be required to develop and implement an environmental monitoring programme approved by local environmental authorities and satisfactory to the EBRD.
The Unit will be the most efficient thermal unit in Armenia. Operation of the unit would have an overall positive impact on the environmental quality in the region by replacing less efficient units. Early commissioning of the Unit would also facilitate the closure of the Metzamor Nuclear Power Plant, which was restarted in 1995 to ease the severe energy shortages in the country.
The technical cooperation programme focuses primarily on assisting the Government in preparing the project for implementation and privatisation, in particular through the hiring of financial and legal advisors for corporatisation/privatisation.
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