Contacts: In Yerevan: Vigen Sargsyan, (374 1) 524-884 vsargsyan@worldbank.org In Washington: Miriam Van Dyck (202) 458 2931 mvandyck@worldbank.org WASHINGTON, March 29, 2006. – The World Bank today approved a Renewable Energy Project for Armenia. The total amount of the project is US$25.050 million, including a US$5 million International Development Association (IDA) credit, and a US$3 million grant from the Global Environment Facility (GEF). The project will also be supported by co-financing of US$7 million from EBRD, US$3 million from the Cafesjian Family Foundation, and US$7.050 million from the government and local financial institutions. This project will assist the government to increase privately owned and operated power generation utilizing renewable energy and to reduce greenhouse gas (carbon dioxide) emissions by overcoming barriers to the development of renewable energy. Following the energy crisis Armenia has achieved remarkable results in reforming the power sector and improving its financial performance. The key remaining challenge for the sector is to ensure sustainable and reliable power supply by: (a) shifting reliance from costly and polluting sources of energy to lower cost and environmentally friendly alternatives; (b) increasing the energy diversification and achieving a higher degree of energy security through the utilization of the indigenous renewable energy resources. While the overall legal and regulatory framework in Armenia is supportive to the development of renewable resources, private investments in renewable projects are impeded by a number of legal, regulatory, informational, financial, and institutional barriers. The Renewable Energy Project will provide assistance to remove the existing barriers and debt financing, as well as technical, legal, managerial and business support to a selected number of renewable projects. “The project will increase the role of renewable resources in Armenia’s electricity generation mix in the future thereby increasing the diversification of electricity supply and energy security,”- said Gevorg Sargsyan, Head of the World Bank team designing the project. “It will also generate environmental benefits by reducing emissions and pollution.” The overarching goal of the project is to build a sustainable market-based capacity to develop and finance renewable energy projects on commercial terms. The Renewable Energy Project has two components: (i) assistance to remove barriers and support project implementation; and (ii) financing of investment. IDA and grant funds will be channeled through the Renewable Energy and Energy Efficiency Fund, which will provide finance to private investors through a financial intermediary. By the time of completion, the project is expected to contribute to the development of about 80MW of additional renewable energy generation capacity, adding 200GWh annual renewable generation to the electricity generation mix. In addition, carbon dioxide emissions are expected to be lowered by around 130,000 tons annually. The Credit will be made to Armenia on standard IDA terms, including 40 years maturity and a 10-year grace period. Since joining the World Bank in 1992 and IDA in 1993, the commitments to Armenia total approximately US $921 million for 42 operations. -###- The Global Environment Facility (GEF) is a mechanism for providing new and additional grant and concessional funding to meet the agreed incremental costs of measures to achieve agreed global environmental benefits in four focal areas: Climate change; Biological diversity; International waters; and Ozone layer depletion. GEF also supports the work of global agreements to combat desertification and eliminate persistent organic pollutants. The World Bank Group is one of GEF’s implementing agencies, and it supports countries in preparing GEF co-financed projects and supervises their implementation. It plays the primary role in ensuring the development and management of investment projects. The Bank draws upon its investment experience in eligible countries to promote investment opportunities and to mobilize private sector, bilateral, multilateral, and other government and non-government sector resources that are consistent with GEF objectives and national sustainable development strategies. Since 1991, the World Bank Group has committed $1.972 billion in GEF resources and $3.037 billion in Bank group co-financing for GEF projects in 80 countries. In addition to GEF and Bank resources, it has mobilized additional co-financing of $6.952 billion from other donors. For further information on Bank’s GEF program, visit http://www.worldbank.org/gef
For further information on GEF, visit http://www.gefweb.org For more information on the World Bank’s activities in Armenia, please visit:
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