EDB to provide $ 20 million loan to Electric Networks of Armenia

ArmInfo. The Eurasian Development Bank (EDB) will provide CJSC Electric Networks of Armenia ("ENA") with a loan of $ 20 million. The loan agreement signing  ceremony took place on December 28 in Yerevan. The document was  signed by ENA General Director Karen Harutyunyan and Head of the EDB  industry and energy unit Vsevolod Smakov.

Answering the question of ArmInfo about the reasons for the reduction  of the loan portfolio from the previously announced $ 100 million to  $ 20 million, Vsevolod Smakov stressed that today the matter concerns  only the first step. The EDB participates in the modernization  program of the electricity grids of Armenia in partnership with other  financial organizations - the European Bank for Reconstruction and  Development and the Asian Development Bank. The terms of the loan  agreement, although not concessional, are quite acceptable. The  funds, continued Vsevolod Smakov, will be directed to the  reconstruction of the grid's network economy, the improvement of the  electricity metering system, and, consequently, to a qualitative  change in the company's financial condition.  In turn, Karen  Harutyunyan, General Director of Electric Networks of Armenia, told  ArmInfo that the attracted resources will be directed to the  implementation of the company's 10-year investment program worth $  726 million (excluding VAT). Some sources of project funding are  already known, while others are under discussion. Karen Harutyunyan  stressed that the expected reduction in electricity tariff rates  starting from February of this year will not affect the company's  activities and will not affect the company's investment portfolio.  "Investors, before extending loans, assess all possible risks,  including the possibility of lowering tariff rates. In addition,  power grids are guided in their activities by margin rates, which are  regulated by law and law acts," the general director said.  Both  interlocutors questioned by ArmInfo avoided answering the question  about the terms of the loan agreement, however, earlier the press  service of the networks reported that the loans are raised at low  rates for Armenia at 2.7% -3.7%. In addition to the EDB, the program  also includes the EBRD and ADB, each of which has already given the  go-ahead to provide loans of $ 80 million.

Earlier, ArmInfo reported that on October 31, 2017, on the sidelines  of the XII International Conference "Eurasian Integration" a  preliminary agreement on the provision to Electric Networks of  Armenia CJSC of $ 100 million for the development and modernization  of the country's energy infrastructure was signed between EDB, Energy  Networks of Armenia CJSC and its shareholder - the Russian Tashir  Group of Companies.  The program will provide an opportunity to  improve the distribution of electricity in Armenia, reduce energy  losses and operating costs, improve maintenance and security  conditions, strengthen and expand the distribution network, connect  new customers to the network, improve maintenance and safety, and  introduce international management standards and automated control  system. The implementation of the 10-year program will provide an  opportunity to reconstruct and modernize electrical equipment, whose  age is 50 years or more. It is also planned to modernize electrical  substations, reconstruct distribution points, completely replace air  and cable lines, and introduce ASKO electricity metering systems  throughout the country. An important place in the investment program  will be given to 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  envisaged from 2020 to completely abandon induction meters. At the  same time, 450 thousand consumers will be involved in the ASKO  system, with the help of which it will be possible to notify  consumers via smartphones. With the introduction of new technologies  the number of employees will also be reduced. The reduction will be  made through optimization. But the owners of the company carry out a  clearly defined socially oriented policy. Those employees who will be  dismissed will be transferred to other jobs created, or will receive  a salary for at least 1 year. It is possible that a significant part  of the equipment will be procured from Armenian enterprises, which  will make it possible to create new jobs, including for the company's  dismissed employees.  The Tashir Group of 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 electric power assets of the Russian energy holding in  the Republic of Armenia - Electric Networks of Armenia and Hrazdan  TPP. Electric Networks of Armenia CJSC was established in May 2002 as  a result of the merger of four state regional electricity  distribution and sales 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 networks  is 36 thousand km. The company serves about 985,000 consumers.  Electric Networks of Armenia CJSC 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 an adjustable rate of return on invested  capital.