[TBILISI] International Financial Organisation (IFC) has arranged a US$140 million financing package for Armenia’s major power generating facilities, a move that will bolster the country’s supply of clean energy, the IFC said on Tuesday.
The funding was allocated to ContourGlobal Hydro Cascade, a subsidiary of ContourGlobal, an international power-generation company, to upgrade the 404-megawatt Vorotan hydro-power complex, parts of which are almost four decades old.
The package includes the IFC’s own loan of US$45 million as well as loans of US$65 million from FMO, the Dutch development bank, and US$30 million from DEG, the German Investment and Development Corporation. “This is the first time we are putting together very large, long-term financing package for infrastructure project in Armenia,” Tomasz Telma, the IFC’s Europe and Central Asia department director, told Reuters.
He did not disclose financial details of the package, but said that in addition to the loan, IFC acted as a sole provider of an interest rate swap, which would help ContourGlobal Hydro Cascade hedge the interest rate risk on the financing package.
The IFC, a member of the World Bank Group, said the Vorotan Cascade was expected to generate around 1,150 gigawatt hours of electricity annually after the upgrade. “The financing is expected to boost electricity reliability, providing a steady supply of clean power to an additional 60,000 residential customers,” Telma said.
The Vorotan Cascade includes three hydropower plants and provides 15 percent of Armenia’s electricity. “Increasing its capacity is key for Armenia, a country that imports fuel to cover around 90 per cent of its energy needs,”the IFC said in a statement.