The World Bank Board of Executive Directors today approved a US$52 million loan for the Electricity Transmission Network Improvement Project (ETNIP) for Armenia.

The World Bank Yerevan Office noted that the new project will improve the reliability of the power transmission network and system management, and support the government’s efforts in ensuring adequate electricity supply across the country.

This project through its first component - strengthening of the power transmission network - targets two major facilities which have the highest rehabilitation priority.

Rehabilitation of the Ashnak substation through replacement of all key equipment will help reduce the number and duration of equipment failures caused by technical reasons, and, thus, improve the reliability of power supply for almost 120,000 electricity consumers.

Rehabilitation of the substation of the Yerevan Thermal Power Center (YTPC) which accounts for 20 percent of total annual electricity generation in Armenia will help reduce the incidence of equipment failures.

“Currently the power sector of Armenia faces a number of challenges, including supply adequacy and reliability. The project focused on rehabilitation of the selected substations will improve power system reliability, and bring direct benefits to all power consumers in Armenia,” said Laura E. Bailey, World Bank Country Manager for Armenia. “This will allow avoiding increased incidence of power supply outages, as well as associated significant social and economic costs.”

Specifically, it is important for ensuring continuous management and control of the power system in case the primary dispatch center (located in down-town Yerevan) fails due to technical or other reasons. The back-up dispatch center will allow to immediately restore the control and management of the power system in case of such failure.

“Armenia's power system will need around 500 MW of new gas-fired generation capacity to preclude the emergence of a supply capacity gap by 2020,” said Arthur Kochnakyan, World Bank Task Team Leader of the Project.

Total financing of the project is US$69.16 million, of which US$17.16 million will be the Government’s contribution. The World Bank will provide a US$52 million IBRD loan of variable spread with a 14.5-year grace period and the total repayment term of 25 years.