Member of the World Bank, International Finance Corporation (IFC) arranged a landmark USD 140 million financing package for the Vorotan Hydropower Cascade.

According to IFC, this is the first major international debt financing package in Armenia’s power sector.

The funding will go to ContourGlobal Hydro Cascade, a subsidiary of ContourGlobal, an international power-generation company that acquired the Vorotan Cascade in 2015.

The package includes a loan of USD 45m for IFC’s own account and parallel loans of USD 65m from FMO, the Dutch development bank, and USD 30m from DEG, the German Investment and Development Corporation.

With the help of the loans ContourGlobal will upgrade the 404-megawatt Vorotan complex. As a result, the project is expected to generate around 1,150 gigawatt hours of electricity annually, thus helping to combat climate change by preventing the release of more than 55,000 tons of greenhouse gases per year.

The financing is also expected to boost electricity reliability, providing a steady supply of clean power to additional 60,000 residential customers.

“We are very pleased to have completed this innovative long-term financing package for Vorotan,” said Ara Hovsepyan, General Manager of ContourGlobal Hydro Cascade.

IFC stressed that the financing package also marks the company’s first debt investment in Armenian infrastructure.

“Globally, we have seen how private businesses can help spur the development of energy infrastructure. The upgrade of Armenia’s Vorotan complex will help provide clean energy for tens of thousands of people. This investment is also expected to open the door to additional private investment in the country’s vital infrastructure,” said Wiebke Schloemer, IFC Regional Industry Head of Infrastructure for Europe, the Middle East and North Africa.

The Vorotan Cascade includes three hydropower plants and provides 15% of Armenia’s electricity.

Armenia became an IFC member in 1995. Since then, IFC’s long-term investment commitments have totaled USD 480m.