Multilateral lenders finance Armenia’s biggest PV plant

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Armenia’s biggest utility scale solar plant has reached another milestone with the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD) and the EU itself having signed off a package of loans and grants for the 55 MW Masrik site.

The Fotowatio Renewable Ventures business owned by Dubai-based Abdul Latif Jameel Energy won the tender for the project in April 2018 but construction has not started in the Mets Masrik municipality of Armenia’s Gegharkunik province.

The IFC private-sector arm of the World Bank will lend $8.9 million to match-fund a loan provided by the Finnish government through the Finland-IFC Blended Finance for Climate Program. The EBRD will lend a further $17.7 million, to complete $35.5 million of borrowings, with the EU adding a €3 million ($3.4 million) grant.

“Armenia has great potential when it comes to the development of renewable energy, in particular solar energy, and the country is a strategic priority for FRV [Fotowatio Renewable Ventures],” said Mikel de Irala, Middle East and Africa managing director for the developer. “The financial close of our first solar project in the Caucasus region is a milestone for FRV and it allows us to expand our reach and continue leading the utility scale solar power industry worldwide. In connection with this project, we are extremely proud to contribute to the country’s sustainable economic growth, local generation of wealth and local employment, thus helping to build a more sustainable future.”

First tender

The site is expected to generate 128 GWh annually, at a price of $0.0419/kWh. The electricity will be sold via a power purchase agreement with utility Electricity Networks of Armenia. The project, with its 9km of transmission lines, was reportedly Armenia’s first competitively-tendered PV project.

“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 [UN’s] sustainable development goals,” said Andrea Wiktorin, an ambassador of the EU delegation to Armenia. “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.”

Armenia aims to generate 26% of its power from renewables by 2025 and has high solar irradiation of 1,720 kWh/m² as well as significant hydropower capacity. The nation takes 20-40% of its power from dams, depending on rainfall. There are five arrays with a cumulative generation capacity of 60 MW under development in addition to the Masrik facility.

Last year, Power business the Abu Dhabi Future Energy Company, also known as Masdar, has inked a memorandum of understanding to install 100 MW of floating PV capacity in the nation as well as 200 MW of ground-mounted solar and the same volume of wind farms.