05 February 2019, News Wires — The International Finance Corporation (IFC), a member of the World Bank Group, said on Monday it had arranged $202 million of debt finance and a guarantee package for the construction of a 250-megawatt power plant in Armenia.
The combined-cycle gas turbine power plant, which is aimed at producing up to 2,000 gigawatt hours annually, will be built in the south of the capital Yerevan.
The plant will help to increase efficiency for gas-fired electricity generation and ensure a reliable power supply in the former Soviet country, which relies on ageing low-efficiency thermal power plants.
Two-thirds of Armenia’s electricity comes from imported fuel. The South Caucasus country of 3.2 million depends heavily on aid and investment from former imperial master Russia.
“This project is part of the World Bank Group’s fundamental efforts to help ensure a reliable power supply in Armenia,” said Jan van Bilsen, IFC regional manager for the South Caucasus.
The IFC is the lead arranger of the package, while World Bank Group member MIGA is providing a guarantee of up to $39 million to help manage non-commercial risks.
The funding is provided by the IFC, which will allocate $163 million, as well as the Asian Development Bank, the OPEC Fund for International Development and German development finance institution DEG.
It will go to ArmPower, which established a consortium comprising Germany’s Siemens Project Ventures GmbH, Italy’s Renco Spa, and SIMEST Spa, an Italian development finance institution.
Renco, which will manage non-commercial risks, will also act as the engineering, procurement and construction contractor for the plant.