Today, IFC, a member of the World Bank Group, the European Bank for Reconstruction and Development (EBRD), and the European Union (EU) announced in Yerevan about the development of the first utility-scale solar power plant in Armenia, which is also the first for the Caucasus.

The 55-megawatt power plant facility, located in Mets Masrik community of Gegharkunik Province, will boost Armenia’s supply of renewable energy and will help the country reduce its reliance on imported fuels.

The IFC reports that the plant is being developed by Fotowatio Renewable Ventures (FRV), part of Abdul Latif Jameel Energy, a global leader in utility-scale renewable energy projects. The company will receive a $35.4 million debt financing package consisting of two $17.7 million long-term loans, one each from IFC and the EBRD.

The project will also receive a €3 million investment grant from the European Union, mobilized by the EBRD. The IFC financing package includes an $8.9 million loan from IFC’s own account and an $8.9 million loan from the Finland-IFC Blended Finance for Climate Program.

The Masrik solar plant is expected to generate more than 128 gigawatt-hours of electricity annually at a competitive tariff of ȼ4.19 per kilowatt-hour. The electricity will be sold under a power purchase agreementto Electricity Networks of Armenia, a utility responsible for distribution of electricity. The project will displace the release of 40,000 tons of carbon emissions annually. Right now, nearly 70 percent of Armenia’s electricity generation depends on imported fossil fuels. As the country’s demand for electricity grows, renewables are expected to provide a sustainable and low-cost alternative source of energy and the Masrik plant is designed to set an example for the rest of the Caucasus.

“The Masrik Solar Energy Project will play a fundamental role in Armenia achieving its energy and climate objectives in line with the EU-Armenia Comprehensive and Enhanced Partnership Agreement and the Sustainable Development Goals. It also has the potential to provide a range of new jobs, create new industrial opportunities in the region and contribute to economic growth, just as the EU promotes with the new European Green Deal,” said Andrea Wiktorin, EU Ambassador, EU Delegation to Armenia.

Cheryl Edleson Hanway, IFC’s Regional Senior Manager for Infrastructure and Natural Resources, said: “Energy security is critical to business activity, which is why supporting Armenia’s renewable energy plan is an important part of IFC’s mission.”