• By The Financial District


The European Bank for Reconstruction and Development,  IFC, a member of the World Bank Group; and the European Union (EU) have  agreed to support the development of the first utility-scale solar power plant in Armenia, which is also the first for the Caucasus.

The 55 MW 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 (FRV), part of Abdul Latif Jameel Energy, a global leader in utility-scale renewable energy projects. The company will receive a US$ 35.4 million debt financing package consisting of two US$ 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, mobilised by the EBRD. The IFC financing package includes a US$ 8.9 million loan from IFC’s own account and a US$ 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 4.19 cents 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 tonnes of carbon emissions annually. Right now, nearly 70 per cent 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.

Aida Sitdikova, EBRD Director, Energy Eurasia, Sustainable Infrastructure Group, said: “The 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 the EBRD’s financing of electricity networks, private generation and privatisations, 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.”

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