Monday, December 23 2019 19:20
Alina Hovhannisyan

Suren Papikyan: Armenia`s energy market will be liberalized in  2023-2024

Suren Papikyan: Armenia`s energy market will be liberalized in  2023-2024

ArmInfo. In 2020, the Ministry of Territorial Administration and Infrastructures of the  Republic of Armenia intends to implement a number of legislative  initiatives that will allow fully liberalize the energy market of the  Republic of Armenia by 2023-2024. The Minister of Territorial  Administration and Infrastructures of the Republic of Armenia Suren  Papikyan stated this at a press conference on December 23.

, he said.

Summing up the results of 2019, the Minister emphasized that during  the current year such programs were implemented that would lead to  Armenia becoming an important energy hub in the region.  In this  regard, he attached importance to the agreement with the German  development bank KfW on the announcement of a tender for three lots  regarding the construction of power lines with Georgia. According to  Papikyan, this will reduce costs and save time on the construction of  important infrastructures that will help Armenia become an important  transit country in the energy sector in the region.

To note, however, that the North-South energy corridor project,  designed to unite the power systems of Iran, Armenia, Georgia and  Russia, has encountered a number of problems. The program for the  construction of 400-kilovolt power transmission line Iran-Armenia and  Armenia-Georgia was to be implemented before the end of 2019. And if  the construction of the Iran-Armenia power transmission line was only  25% completed, then the parties have not yet begun to build a similar  power transmission line with Georgia. On March 15 last year, the  technical commission to improve the reliability and efficiency of the  Armenian electric power system approved the terms of reference for  the construction of the Armenia- Georgia power transmission line. The  terms of reference were developed by the German KfW bank, which  finances the program, and FICHTNER, which won the tender to identify  the project consultant.

According to the terms of reference, the project is divided into  several stages. At the first stage, it was planned to modernize an  electric substation with a voltage of 220 kV, build a new substation  with a voltage of 400 kV, and also build a new overhead power line to  the Georgian border. At the second stage, it was planned to build an  electrical substation with a voltage of 500 kV. However, in order to  increase the effectiveness of the program, it was planned to use  existing electrical substations, the modernization of which is less  expensive than the construction of new ones. At the same time, a  solar power station will be erected on the existing areas where it  was planned to build an electric substation, the construction costs  of which will be reduced through the use of existing infrastructures.  As a result, the cost of the entire Armenia-Georgia transmission line  construction program will be reduced by 30%. Moreover, the  construction of a solar power plant will save at least another 20%.  At a meeting of the commission, it was noted that the first phase of  the project should be completed no later than the third Iran-Armenia  power transmission line currently under construction. In general, the  Iran-Armenia transmission line construction program should be  completed in parallel with the construction of the second power unit  of the Yerevan TPP.

As ArmInfo previously reported, sources of financing for the first  two stages are already known. The preliminary cost of the  Armenia-Georgia power transmission line construction program,  according to FICHTNER, is EUR 326.9 million, 10% of which should be  part of Georgia's contribution. The first two stages of the program  are estimated at 188.2 million euros. To this end, in 2014-2015,  three loan agreements were signed. In particular, the German KfW bank  allocated 168 million euros in the form of a loan, and another 10  million euros were provided by the European Investment Bank. It is  expected to receive another 10 million euros in the form of a grant  from the European Commission. As for the Iran- Armenia high-voltage  power line, the project is financed by the Iranian side, the total  cost of the program is $ 107 million. However, given the new  sanctions imposed by the United States against Iran, there is concern  about a reduction in the volume of this investment program.

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