Global Hydro Cascade invest $ 70 million in modernization of Vorotan cascade HPP

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).