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Projects in Energy Sector

Power System Projects
Geothermal Project
The Geothermal Project is implemented by the Fund. The Grant Agreement of Geothermal project in Armenia was signed on 26.02.2009 between the Republic of Armenia and Development International Bank to the total amount of USD 1.5 mln. The Grant Agreement was signed on 26 February 2009. It is envisaged USD 300 thousand or 17% co-financing of the Project from RA State budget. At the same time an Agreement of Geothermal project was signed on 26.02.2009 between the Bank and Armenia Renewable Resources and Energy Efficiency Fund. For the Project implementation a Supplementary Agreement was signed on 10 April,  2009 between the Ministry of Finances of the Republic of Armenia and the Fund, by which 1.5 mln. USD has been given gratis /without return/  to the Fund exceptionally for implementation of the Project’s objectives. The project’s purpose is to evaluate the technical and economic expediency and feasibility of prospecting the boring of geothermal site, having the highest geothermal potential. According to geophysical data, due to rapid development of new volcanic processes Armenia is considered to be one of the perspective territories for geothermal energy development. The above-mentioned refers to the Syunik volcanic highland, especially to the geothermal spring of Jermaghbyour.
By geothermal energy utilization the electricity production is considered to be perhaps the only technology of the whole RE sector with which it is possible to provide with guaranteed electricity production for covering the baseline electricity load. You see solar, wind and small scale energies considered to be principally non-regulatory sources in this sense. Therefore, it is not surprising that a great attention is given to utilization of especially geothermal energy in Armenia.
Within REP framework under a special study diverse and extensive data were consolidated and thoroughly analyzed on high potential geothermal energy sources available so far in Armenia. As a result, the two perspective sites were marked out for which the presence and availability of geothermal energy source with high potential had maximum feasibility. Special study projects were prepared for those sites.
It should be underlined that the received results were so encouraging that the World Bank and international GEOFUND Fund additionally allocated to Armenia separate grant financing for complex investigations and explorations in two perspective sites (Gridzor, Karkar) of Syunik and Gegharkunik provinces of Armenia  (GEF TF-092563). At present these works are in process.

Renewable Energy Project funded by the World Bank

Renewable Energy (RE) Project.
The development of Renewable energy in Armenia is considered to be one of the four supporting columns for the strategy of the energy safety and total technological development policy in the country. The Funds, with support of World Bank credit and Global Environment Facility Trust Fund, implements the Renewable Energy (RE) Project.  The Project’s objective is to increase the portion of the private companies functioning in renewable energy sector in the total volumes of power production.   The project’s global objective is to reduce emissions of carbon dioxide (CO2) of green-house gases by abolishing the factors impeding the renewable energy development. One of the Project directions aims at promoting the investments in the sector and within its framework it is conducted reformation of the legal field, evaluation of renewable sources, study of different technology applications, ecological consideration, public information and etc. The second direction is the long-term credit resources allocated for construction or strengthening of wind and small hydro power plants. In certain RE directions (solar photovoltaic convertors /SPC/, bio-fuel production – first of all bio-ethanol production, geothermal energy, hydrogen energy, fuel batteries) there is already a considerable scientific and personnel potential in Armenia  and in certain cases (e.g. hydrogen energy, fuel batteries) there is an exceptional potential for our whole region. In a number of enterprises and organizations of the country a small scale SPC production, installation and operation is realized, technological processing is carried out for modern PV elements, sensors/transducers and other equipment -  also by application of nanotechnologies. The creation of Geographical Informative System /GIS/ of Renewable Energy in RA Lori province has led to a very good result, the realization of which allows to cumulate new knowledge and skills in the republic, to combine data previously under different administrations’ subjection and to enhance the implementation efficiency of RE projects in Armenia. This is a comprehensive and multi-sphere system, consists of interconnected data bases and the very GIS. The main objective is to develop, create and put into operation the bilingual (Armenian, English) GIS in Armenia and available via Internet. In order to support to the implementation of Renewable Energy Project, the Development Credit Agreement was signed on April 7, 2006 between the Republic of Armenia and International Development Association, whose purpose is to increase the industrial capacities and production volumes in renewable energy sector, as well as to reduce the emissions of green-house gasses.

Urban Heating Project funded by the World Bank
The Urban  Heating Project /UHP/ is aimed at extending the application of clean, productive, safe and available heating technologies in RA multi-storied buildings and schools.  A number of activities are projected within UHP framework, including regulations, safety norms and standards, improvement of legal field, rendering of heating services, developing capabilities of local financial organizations and communities, implementing large-scale informative campaigns and public informative projects, creating of special consultative center(s). Within the project the financing of thermal infrastructures is implemented. The Banks, chosen by the Fund, implement crediting. In order to improve the heating services the Banks provide sub-credits to the apartment owners – both for private apartment heating and for organizing the heating by collective solutions.  The rehabilitation of water supply of municipal schools is the component of municipal heating credit project.

The Fund, as an agent of the Government, implements the restoration works of the schools through design contracts, civil works and technical supervision. Instead of envisaged 100 schools, the Fund has implemented construction works of the whole system of the boiler and heating in 120 schools and energy efficiency activities in13 schools (thermal insulation of walls,  attic,  installation of doors, windows and etc.). In selected urban schools the installation and rehabilitation works of local thermal systems operating on gas have been implemented by provided grant funds. All the schools were out of Yerevan and were chosen by the principle of investments efficiency estimated for each pupil.
In addition to Urban heating Project B2 component -  Global Partnership Output-based Aid (GPOBA ) Project has approved the provision of direct grant to the amount of  3.1mln. to the Fund for ensuring connection of the apartments of vulnerable families to the systems of gas and thermal supply. When realizing MHP components and GPOBA grant project for usage of credit and grant funds the same approach is applied. In addition by Urban Heating Project Component B it is envisaged USD 3 mln. allocation and co-financing by the Government totaled to USD 530,000.

Global Partnership Output-based Aid (GPOBA ) is a Fund of multi-donor financing and acting under the supervision of the World Bank, which has allocated USD 3.1 mln. to about  8000 needy families living in municipal multi-storied buildings to provide them with capital grant, which will make gas and heating qualified services accessible for vulnerable families. The key objective of GPOBA is to give opportunity to vulnerable families of the developing countries to make use of main reliable infrastructural and social services by large-scale application of Output-based Aid /OBA/approaches.
Within the framework of proposed OBA Project donation is implemented by allocating capital grants to indigent families living in Armenia, to provide gas and heat supply for needy families’ apartments by the following alternative financing:
a) alternative of solution by individual heater, which envisages connection of the apartments of not-wealthy families to the systems of gas and thermal supply and/or installation of an individual gas heater.
b) alternative of solution by local heating, including connection of the apartments of vulnerable families to boilers installed in buildings or within the district.
In order to make the participation of indigent families living in multi-storied buildings possible in the Project and to render reasonable heating services to them, the Fund has financed the installation costs of the heaters, as well as the expenses of the works for gas piping and connection to the network. At least 12000 families have submitted applications to the Fund during the last 3 years, of which 5000 have already been provided assistance. About  10,000  indigent families are still waiting for ecologically clean heating services, the financing of which will be carried out by Global Partnership Output-based Aid (GPOBA ) principle.

IFC Armenia Sustainable Energy Finance Project Outline
Project Objective
The IFC Sustainable Energy Finance Project is designed to establish a sustainable market for energy efficiency and renewable energy investments and contribute to the energy self-sufficiency of Armenia through work with local and in partnership with international financial institutions.

The IFC Approach.
1.  Supporting the development of renewable energy financing through financial institutions. The Project seeks to educate local financial institutions and provide them with advisory services that will allow them to access and market renewable energy financing products.
2.   Create a platform to support financial institutions in the development and marketing of energy efficiency lending. IFC will enter into advisory service agreements with partner financial institutions in the region in order to develop energy efficiency awareness and internal capacity.
3.    Improve the regulatory framework for the development of renewable energy. The Project will focus on addressing the existing regulatory issues associated with the Power Purchase Agreement and the feed-in tariff for renewable energy technologies.
4.    Increase the awareness of renewable energy project developers and the expertise of local design companies on the application of modern design solutions and new technologies to ensure the long-term sustainability of renewable energy projects. The Project intends to organize workshops and conferences in close cooperation with the Union of Small Hydropower Plants and other local organizations in order to demonstrate to renewable energy developers and designers international best practices.

Build awareness and market demand for sustainable energy finance through a broad public awareness campaign. The Project will undertake a structured market development and public awareness campaign to educate key stakeholders including policy makers, financial institutions, and small and medium enterprises about the potential benefits of Armenia Sustainable Energy Finance Project. IFC will draw upon applicable awareness campaign techniques in neighboring regions to promote these products. official site

ArmSEFF-The Armenian Sustainable Energy Financing Facility

The European Bank for Reconstruction and Development (EBRD) has initiated in Armenia through partner banks a 20 million USD credit line that is targeting private Armenian companies in all sectors, which intend to invest in energy efficiency or renewable energy projects. This credit line is a part of the Armenian Sustainable Energy Financing Facility (ArmSEFF) which was officially launched in November 2010.
ArmSEFF is supported by a substantial and complex free technical assistance that is provided by the team of international and local experts (ArmSEFF-team) to the companies and participating banks, in order to overcome a number of barriers that may hinder the implementation of the projects.

ArmSEFF Graphic

ArmSEFF loans are available through the partner bank(s): Anelik Bank.
Maximum possible Sub-loan amount is USD 2,5 million.

European Bank for Reconstruction and Development
Since the establishment in 1991 RBRD has become the largest financial investor in our region of operations which stretches from central Europe and the Western Balkans to central Asia. With the ability and willingness to bear risk on behalf of our clients, we help their countries in the region to become open, market economies. They are owned by 61 countries, the European Union and the European Investment Bank.The EBRD is an international financial institution that supports projects from central Europe to central Asia. Investing primarily in private sector clients whose needs cannot be fully met by the market, the Bank fosters transition towards open and democratic market economies. In all our operations we follow the highest standards of corporate governance and sustainable development. The main purpose is  to promote market economies that function well – where businesses are competitive, innovation is encouraged, household incomes reflect rising employment and productivity, and where environmental and social conditions reflect peoples’ needs.The EBRD offers a wide range of financial instruments and takes a flexible approach in structuring its financial products. The principal forms of direct financing provided by the EBRD are loans, equity and guarantees: loans are tailored to meet the particular requirements of a project. official site

The United Nations established its office in Armenia in December
The United Nations Office was established “with a view to supporting and supplementing the national efforts in solving the most important problems of economic development and promoting social progress and a better standard of life. Whereas the Government of the Republic of Armenia has agreed to ensure the availability of the necessary facilities to enable the Interim Office to perform fully and effectively its functions”.
In October 1995, the UN Office moved to a new building in the centre of Yerevan, provided by the Government of Armenia to the UN free of charge. In 1998, the UN Secretary-General designated the UN Armenia Office as a UN House.
The United Nations Resident Coordinator in Armenia synchronizes the activities of the UN family, which involves the following resident UN agencies, funds and programmes.
official site

The Global Environment Facility (GEF) unites 182 member governments — in partnership with international institutions, nongovernmental organizations, and the private sector — to address global environmental issues.
An independent financial organization, the GEF provides grants to developing countries and countries with economies in transition for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants. These projects benefit the global environment, linking local, national, and global environmental challenges and promoting sustainable livelihoods.
Established in 1991, the GEF is today the largest funder of projects to improve the global environment. The GEF has allocated $9.5 billion, supplemented by more than $42 billion in cofinancing, for more than 2,700 projects in more than 165 developing countries and countries with economies in transition. Through its Small Grants Programme (SGP), the GEF has also made more than 12,000 small grants directly to nongovernmental and community organizations, totalling $495 million. official site

KfW thus helps people in Armenia to improve their living conditions. The development opportunities of the country and its people are closely intertwined with the establishment of sustainable market-economy structures in the country. In addition, the Caucasus Initiative promotes projects involving regional cooperation among the three Caucasus republics, Armenia, Azerbaijan and Georgia.
KfW has had its own in-country representative office in Erevan since 1998.
German Financial Cooperation is financing projects in four priority areas of cooperation:
·    Sustainable economic development
·    Energy
·    Municipal infrastructure
·    Health and the environment
official site