Armenia’s recent political developments aren’t the only power shifts electrifying the national capital, Yerevan.
When the country’s 250 megawatt (MW) combined-cycle gas-fired thermal power facility in the south of Yerevan starts operating in 2021, it will help replace electricity produced by aging gas-fired power plants. Because the plant will be about 50 percent more efficient than old facilities, it is expected to reduce imported gas cost by around $25 million per year while improving the reliability and security of the energy supply. It will also help reduce the greenhouse emissions per unit of electricity generated. It is expected to be the cheapest privately owned thermal power generator in the country, with the highest efficiency.
The project, supported by IFC and the Multilateral Investment Guarantee Agency (MIGA), is being developed by a consortium comprising German Siemens Project Ventures GmbH (part of Siemens Financial Services), Italian Renco Spa, and SIMEST Spa (CDP Group), an Italian development finance institution, through a special purpose company, ArmPower CJSC. The company will sell its generation output to Electric Networks of Armenia (ENA), which distributes and sells electric energy in the country.
IFC and MIGA have arranged a landmark $202 million debt finance and guarantee package to back this initiative. Support includes a $42 million loan for IFC’s own account, and $121 million from IFC’s innovative syndications platform, the Managed Co-Lending Portfolio Program (MCPP). It also includes parallel loans from the Asian Development Bank, the OPEC Fund for International Development, and the German development finance institution DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH. MIGA is providing a guarantee of up to $39 million to help Renco Spa manage non-commercial risks.
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