ArmInfo. American Company Global Hydro Cascade invest $ 70 million in the modernization of Vorotan cascade HPP. On May 17, in the fields of Armenian-American forum dedicated to prospects of development of alternate power, answering to ArmInfo, said the Deputy Minister of Energy Infrastructures and Natural Recourses of Armenia Hayk Harutyunyan.
According to him, the funds will be directed to change the entire hydro technical equipment which is 30 years old and need modernization. "The equipment of the cascade worn out morally and physically", he said, adding that after the modernization Armenia will receive in fact a new cascade HPP. He said that the process of competitive selection of the general contractor of the project is at the final stage. As expected, the work will begin this year and will last a maximum of 2-3 years.
As ArmInfo reported earlier, on March 29, the Public Services Regulatory Commission of Armenia approved the decision to redirect a KfW bank loan of 51 million EUR from the Armenian government to the new owner of the Vorotan cascade of the HPP of the American company Global Hydro Cascade. The funds will be used to implement the modernization program for the HPP cascade. It is envisaged, in particular, to completely replace turbines, generators, turbine regulators, control systems of Tatev, Shamba and Spandaryan HPPs that are part of the Vorotan cascade of HPPs. Maintenance of credit resources will be provided by the company at the expense of the tariff from the sold electricity. The International Finance Corporation (IFC), a member of the World Bank Group, attracted an international financial package of $ 140 million for the modernization of the Vorotan cascade of HPPs. The funds will also be used to modernize the Vorotan Cascade of HPPs with a total installed capacity of 404 megawatts. Of this amount, $ 45 million in the form of a loan will be provided from IFC's own funds, $ 65 million from the German Development Bank (KfW), and $ 30 million from the German Investment and Development Corporation. The vast majority of the main equipment of the Cascade has been operating for more than 40 years, obsolete physically and morally. As a result of modernization, it is planned to produce 1,150 gigawatt/h of electricity, which, in addition to economic efficiency, will allow to actively combat climate change, preventing the release of 55 thousand tons of greenhouse gases into the atmosphere. It is planned that with the implementation of the project the stability of the energy system of Armenia will increase, and 60 thousand consumers will be able to steadily receive "clean energy".
To note, earlier ArmInfo reported that the asset portfolio of Vorotan Hydro Cascade, which is the property of Contour Global Hydro Cascade (US), will be performance security. The relevant permit was issued on November 7 by the Public Services Regulatory Commission (PSRC). 100% of the company's shares will be equally distributed among HSBC Trustee Company, International Finance Corporation, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), Deutsche Investitions und Entwicklungsgesellschaft (DEG), and the Republic of Armenia. The pledge of property will allow attracting additional 150 mln EUR for modernization of Vorotan Hydro Cascade, exclusive of the 51 mln EUR the Armenian government attracted from the German KfW Bank before selling the Cascade to the US company. Previously the Armenian Government took a decision to renew the agreement with Contour Global to specify the US investors' obligations related to redemption of the remaining part of the 51 mln EUR loan provided by the German KfW Bank. On 12 August 2015, Contour Global and the Republic of Armenia announced the completion of the deal on acquisition of the assets of Vorotan Hydro Cascade for $180 mln. In 2015 Vorotan Hydro Cascade generated ensured 15% of the electric power generated throughout the country. The company received a permit for running 3 HPPs of the Vorotan Hydro Cascade (total capacity of 404.2 MW) for 25 years: Spandaryan HPP (76 MW), Shamb HPP (171 MW) and Tatev HPP (157.2 MW).