Wednesday, July 15 2020 18:07

ArmInfo.IFC, a member of the World Bank Group, the  European Bank for Reconstruction and Development (EBRD), and the  European Union (EU) have signed on to support the development of the  first utility-scale solar power plant in Armenia, which is also the  first for the Caucasus. This is stated in the IFC press release  received by ArmInfo. 

The 55-megawatt power plant facility, located in Mets Masrik  municipality, Gegharkunik Province, will boost Armenia's supply of  renewable energy and will help the country reduce its reliance on  imported fuels. 

The plant is being developed by Fotowatio Renewable Ventures, which  is part of Abdul Latif Jameel Energy, a global leader in  utility-scale renewable energy projects. According to the source, the  company will receive a $35.4 million debt financing package  consisting of two $17.7 million long-term loans, one each from IFC  and the EBRD. The project will also receive a ?3 million investment  grant from the European Union, mobilized by the EBRD. 

The IFC financing package includes an $8.9 million loan from IFC's  own account and an $8.9 million loan from the Finland-IFC Blended  Finance for Climate Program. 

The Masrik solar plant is expected to generate more than 128  gigawatt-hours of electricity annually at a competitive tariff of EUR  4.19 per kilowatt-hour. The electricity will be sold under a power  purchase agreement to Electricity Networks of Armenia, a utility  responsible for distribution of electricity. The project will  displace the release of 40,000 tons of carbon emissions annually.   Right now, nearly 70 percent of Armenia's electricity generation  depends on imported fossil fuels.  As the country's demand for  electricity grows, renewables are expected to provide a sustainable  and low-cost alternative source of energy and the Masrik plant is  designed to set an example for the rest of the Caucasus.

"Armenia has great potential when it comes to the development of  renewable energy, in particular solar energy, and the country is a  strategic priority for FRV," said Mikel de Irala, Managing Director,  Middle East and Africa, FRV. "The financial close of our first solar  project in the Caucasus-region is a milestone for FRV and it allows  us to expand our reach and continue leading the utility-scale solar  power industry worldwide. In connection with this project, we are  extremely proud to contribute to the country's sustainable economic  growth, local generation of wealth and local employment, thus helping  to build a more sustainable future."

Aida Sitdikova, EBRD Director, Energy Eurasia, Sustainable  Infrastructure Group, said: "EBRD is delighted to support this  landmark project, which builds on our active policy engagement and  investments in the Armenian power sector since 1993. Following EBRD's  financing of electricity networks, private generation, and  privatizations, we are pleased to provide financing for this first  utility-scale solar project, as we are working with authorities on  developing further renewable auctions in wind and solar. We are  deeply grateful to our partner, the European Union, for co- financing  this remarkable project with us."

"The Masrik Solar Energy Project will play a fundamental role in  Armenia achieving its energy and climate objectives in line with the  EU-Armenia Comprehensive and Enhanced Partnership Agreement and the  Sustainable Development Goals. It also has the potential to provide a  range of new jobs, create newindustrial opportunities in the region  and contribute to economic growth, just as the EU promotes with the  new European Green Deal," said Andrea Wiktorin, EU Ambassador, EU  Delegation to Armenia.  

Cheryl Edleson Hanway, IFC's Regional Senior Manager for  Infrastructure and Natural Resources, said: "Energy security is  critical to business activity, which is why supporting Armenia's  renewable energy plan is an important part of IFC's mission. The  Masrik solar project is an additional milestone in IFC's support of  Armenia's efforts over the years to attract private sector investment  to power generation.  It is the first step in the country's ambitious  solar power plans and will serve as an example to be followed by many  more projects in the years to come." 

The project-which includes the development, construction, and  operation of a 55-megawatt power plant and a nine-kilometer  transmission line-is the first competitively-tendered solar-  photovoltaic project in Armenia. The World Bank helped the government  prepare the project and provided transaction advisory support. The  bidding process, backstopped by the Scaling up Renewable Energy  Program and the World Bank, was highly competitive.  The Masrik  project comes after 15 years of collaboration between the World Bank  Group and Armenia that has helped implement sweeping reforms to  deliver more efficient power supply to consumers. IFC, the EBRD, and  the EU have supported Armenia's power sector through attracting  private investment, bringing in global experience, and supporting the  newest technologies. The increase of renewable energy capacity  represents an important objective under the EBRD's and IFC's country  strategies for Armenia.