The World Bank Board of Executive Directors approved today a USD 30 million loan for the Power Sector Financial Recovery Program-for-Results (PforR) for Armenia.

World Bank Armenian office stressed that this project will support the Government’s efforts to maintain adequate and reliable electricity supply by improving the financial condition and governance of the state-owned power generation companies and the private power distribution company.

“Improvement of the financial standing and governance of the state-owned power generation companies, and a better managed financial relationship with the private power distribution company is critical for maintaining adequate and reliable electricity supply at affordable tariffs, “ said World Bank Country Manager for Armenia Laura Bailey.

There are four results areas which this Program will achieve: elimination of cash outflows of state-owned power generation companies for non-core business related reasons; reduction of expensive commercial loans, recovery of receivables, and repayment of YTPC’s payable for natural gas; setting of tariffs reflecting changes in the cost of electricity supply, and maintaining the generation capacity of the gas turbine at YTPC’s Combined Cycle Gas Turbine (CCGT) plant.

“The beneficiaries of the Program are all electricity consumers in Armenia along with the state-owned generation companies and the private power distributer. Financial health of ANPP and YTPC, as well as ENA, will ensure they have enough resources to spend on maintenance and finance some of the new investments required for reliable supply of electricity. Moreover, 140,000 businesses and other legal entities connected to the network will also benefit because the Program will help to fully meet their demand for electricity in a reliable manner,” said World Bank Task Team Leader of the Project Arthur Kochnakyan.

The loan will be provided for 14.5-year grace period and the total repayment term of 25 years.