The International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) have agreed to provide a total of $202m financing to ArmPower for establishing a 250MW gas-fired combined-cycle cogeneration power plant in Armenia.
ArmPower is a special purpose company owned by Renco Power and Siemens Project Ventures. The financing offered by the organizations is expected to help expand and diversify power generation sources developed by private sector in Armenia.
The financing will support in establishing the plant, which is expected to have an annual production of up to 2,000GWh and it is touted to be the country’s first greenfield project-financed power plant.
Two-thirds of the electricity generated in Armenia comes from imported fuel. The country is dependent on dated low-efficiency thermal power plants for energy generation. A modern combined-cycle gas turbine power plant in the south of Yerevan is expected to increase efficiency for gas-fired electricity generation, while also helping lower gas costs and cut greenhouse gas emissions.
The project will also create employment, both during the construction and operations phases, boosting local employment, while also adding significantly to the economy.
IFC is the lead arranger of financing package for the power facility. The package includes a $42m loan for IFC’s own account and $121m from IFC’s innovative syndications platform, the Managed Co-Lending Portfolio Program, plus parallel loans from the Asian Development Bank, the OPEC Fund for International Development, and the German development finance institution DEG.
MIGA is offering a guarantee of up to $39m to help Renco Spa manage non-commercial risks.
IFC the South Caucasus regional manager Jan van Bilsen said: “Reliable electricity ensures access to basic services and is an important engine of economic growth, job creation, and poverty reduction. This project is part of the World Bank Group’s fundamental efforts to help ensure a reliable power supply in Armenia.
“We are committed to continue seeking opportunities to strengthen the country’s power sector to drive further development and growth.”
ADB’s participation is expected to further strengthen the project’s environmental and social standards and support reductions in greenhouse gas emissions in the country.