Yerevan /Mediamax/. German KfW Bank will allocate EUR 19.5mln for the second stage of funding small HPPs in Armenia.

Mediamax reports that the corresponding agreement was singed between the Central Bank of Armenia and KfW in Yerevan today.

KfW will allocate means for the CB for the term of 12 years with 3 years of grace period at a subsidized interest rate.

Armenian CB Chairman Artur Javadyan highlighted that KfW is one of the best partners of Central Bank of Armenia. He described the program as “unique”, noting that for the first time the terms of providing a loan for HPP financing will differ from the market ones. In particular, the interest rate, at which the banks will provide credits, will be limited to 10.5-11% annually. Artur Javadyan informed that this requirement was introduced in connection with the influence of this interest rate on tariffs for electricity.

At the first stage of “Renewable Energy Assistance” program, which was launched in November, 2004, KfW provided EUR 6mln for crediting 14 small HPPs, which were fully placed. As of today, the entire volume of small and big HPPs financing in Armenia makes 24.5bln AMD. 

First Deputy Chairman of KfW Bank Roland Ziller informed today that in total, the bank will provide EUR 120mln to Armenia this year. Besides crediting of small HPPs, the means will be directed at developing mortgage market of Armenia, reestablishment of water supply in Vanadzor and Gyumri, financing of HPP Vorotan cascade