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World Bank Approves US$52 Million Loan To Strengthen Power Supply Re

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  • World Bank Approves US$52 Million Loan To Strengthen Power Supply Re

    WORLD BANK APPROVES US$52 MILLION LOAN TO STRENGTHEN POWER SUPPLY RELIABILITY IN ARMENIA

    12:42, 31 Mar 2015
    Siranush Ghazanchyan

    The World Bank Board of Executive Directors on March 30 approved a
    US$52 million loan for the Electricity Transmission Network Improvement
    Project (ETNIP) for Armenia.

    The new project will improve the reliability of the power transmission
    network and system management, and support the Government's efforts
    in ensuring adequate electricity supply across the country, according
    to the World Bank.

    Armenia's National Energy Security Concept prioritizes rehabilitation
    of key power transmission network assets as a prerequisite for reliable
    power supply in the country. This project through its first component
    - strengthening of the power transmission network - targets two major
    facilities which have the highest rehabilitation priority.

    Rehabilitation of the Ashnak substation through replacement of all
    key equipment will help reduce the number and duration of equipment
    failures caused by technical reasons, and, thus, improve the
    reliability of power supply for almost 120,000 electricity consumers.

    The Ashnak substation was commissioned in 1983 and has undergone
    no major rehabilitation since then. This substation is essential
    for ensuring reliable power supply to consumers in Eastern and
    North-Eastern parts of Armenia, including a large dairy products
    company, an asphalt plant, and a diamond polishing and jewelry
    production factory, which employ around 3,500 people.

    Rehabilitation of the substation of the Yerevan Thermal Power Center
    (YTPC) which accounts for 20 percent of total annual electricity
    generation in Armenia will help reduce the incidence of equipment
    failures. The overall cost of meeting the electricity demand in the
    country will significantly increase if it is disconnected from the
    grid due to failure of its substation. The substation was commissioned
    in 1965, and has not been rehabilitated since then. Therefore, it is
    essential for ensuring adequate and low-cost electricity supply to
    all of the 1,040,000 electricity consumers in the country.

    "Currently the power sector of Armenia faces a number of challenges,
    including supply adequacy and reliability. The project focused
    on rehabilitation of the selected substations will improve power
    system reliability, and bring direct benefits to all power consumers
    in Armenia," said Laura E. Bailey, World Bank Country Manager for
    Armenia. "This will allow avoiding increased incidence of power supply
    outages, as well as associated significant social and economic costs."

    Under the second component - improvement of the power system management
    - establishment of a back-up dispatch center is envisaged which will
    allow improving the management of the power system.

    Specifically, it is important for ensuring continuous management
    and control of the power system in case the primary dispatch center
    (located in down-town Yerevan) fails due to technical or other
    reasons. The back-up dispatch center will allow to immediately restore
    the control and management of the power system in case of such failure.

    "Armenia's power system will need around 500 MW of new gas-fired
    generation capacity to preclude the emergence of a supply capacity
    gap by 2020," said Arthur Kochnakyan, World Bank Task Team Leader of
    the Project. "Preparation of a new electricity generation project
    is another critical activity that will be implemented within this
    project. The Government plans to construct a new combined cycle gas
    turbine, which will require a number of preparatory activities for
    which no financing is available."

    Total financing of the project is US$69.16 million, of which US$17.16
    million will be the Government's contribution. The World Bank will
    provide a US$52 million IBRD loan of variable spread with a 14.5-year
    grace period and the total repayment term of 25 years.

    Since joining the World Bank in 1992 and IDA in 1993, the commitments
    to Armenia total approximately US$2,118.730 million.

    http://www.armradio.am/en/2015/03/31/world-bank-approves-us52-million-loan-to-strengthen-power-supply-reliability-in-armenia/

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