Asian Development Bank to Provide $ 80 Million loan to "Electric Networks of Armenia"

ArmInfo. The Board of Directors of the Asian Development Bank approved a loan program, providing for the issuance of a credit to "Electric Networks of Armenia" in the amount of $ 80 million.

According to ADB, the funds will be used to improve distribution networks and improve energy security.  "Effective distribution networks are very important for ensuring Armenia's stable economic growth. The investment program will contribute to Armenia's energy independence. The cooperation with ESA will have a significant impact on the Armenian people and business environment, improving the reliability of electricity supply through the proposed investment program," said the senior specialist for Investment management of the private sector Sonali Tang.

Investments will help improve the distribution of electricity in the private sector, reduce losses in the energy system from the current 10% to 8% by 2021. The program will provide an opportunity to improve the state of electricity distribution in Armenia, reduce electricity losses and operating costs, improve maintenance and security conditions, strengthen and expand the distribution network, connect to the network of new customers, increase the level of maintenance and security, and implement international management standards and Automated control system.

Earlier, at a press conference in Yerevan, responding to a question from ArmInfo, the general director of "Electric Networks of Armenia" CJSC Karen Harutyunyan reported that the company intends to attract from the Asian Development Bank and the European Bank for Reconstruction and Development a total of $ 160 million to implement its investment program, Calculated up to 2020. According to him, preliminary documents have already been signed with financial structures. Finally, the agreements will be signed, at least a month later. The credit resources will be directed to the company's implementation of its five-year investment program at a cost of $ 200 million. As Karen Harutyunyan noted, the funds will be attracted to a private company without state guarantees, which is unprecedented. The resources involved will not affect the company's credit burden.

In his turn, the chairman of the Board of Directors of "Electric Networks of Armenia" CJSC Karen Darbinyan stressed that, in parallel with the investment program until 2020, a new program is being developed for 2018-2028. Worth $ 500 million. Discussions on the program are already underway, documents are being prepared for submission to the Commission on Regulation of Public Services. The implementation of the 10-year program will provide an opportunity to reconstruct and modernize electrical equipment, whose age is estimated at 50 years or more. It is also planned to modernize electric substations, reconstruct distribution points, completely replace air and cable lines, and introduce the ASKO electric power accounting system throughout the country. An important place in the investment program will be the construction of the electric substations "Circus", "Purak" and "Malibu", from which electricity is supplied to the consumers of the center of the Armenian capital. It is also planned to completely abandon induction meters from 2020. In 2017, 75 thousand consumers will receive new electronic meters. Last year, 35,000 such meters were installed. At the same time, 450,000 consumers will be involved in the ASKO system, with the help of which it will be possible to notify consumers using smartphones. With the introduction of the latest technology, the number of employees of the company will also decrease. Reduction will be made through optimization. But the owners of the company carry out a clearly expressed socially oriented policy.  Those employees who will be reduced or transferred to other created jobs, or at least 1 year will receive wages. It is not excluded that a significant part of the equipment will be purchased at the enterprises of Armenia, which will create the opportunity to create new jobs, including for employees of the company, which will be reduced. The group of Tashir companies headed by a large Russian businessman of Armenian origin Samvel Karapetyan and Inter RAO on September 30, 2015 signed an agreement on the sale and purchase of electricity assets of the Russian energy holding company in the Republic of Armenia - ZAO Electric Networks of Armenia and Hrazdan Thermal Power Plant. The reason for the sale of the company was public outrage over the unjustified, according to consumers, increase in electricity prices by about 16.7% (6.93 drams per 1 kWh). The regulator's decision to raise the tariff caused a wave of protest, and in order to contain the protest mood, the Armenian authorities agreed to audit the validity of the PSRC decision on the growth of tariffs and the activities of the Electric Networks. In addition, the country's authorities have decided to subsidize the increased tariff for the population and small and medium-sized businesses, until the energy company's audit is completed. ZAO Electric Networks of Armenia was established in May 2002 as a result of the merger of four state regional electricity distribution and distribution companies: Yerevan Electric Networks, Northern Electric Networks, Southern Electric Networks and Central Electric Networks. The main activity of the company is the regulated distribution and sale of electricity. The total length of the networks is 36 thousand km. The company serves about 985 000 consumers. CJSC "Electric Networks of Armenia" has an exclusive license for transmission and distribution of electricity in the territory of the Republic of Armenia at guaranteed tariffs, calculated on the basis of the company's costs and a regulated rate of return on investment.