Armenia`s transition to clean energy and power transmission grid  upgrades to benefit from World Bank support

ArmInfo.The World Bank's Board of Executive Directors approved $40 million in support of the Enabling  the Energy Transition project for Armenia, which will assist the implementation of the Energy Sector Development Strategy to 2040 of the Republic of Armenia.  

The investments will focus on the rehabilitation of power transmission substations, the adoption of  reforms to allow the transmission company to access private financing, and the promotion of energy sector modernization as well as regional energy cooperation among emerging and developing economies in the Europe and Central Asia region.

Armenia's power sector is heavily dependent on imported fuels,  especially natural gas, which creates significant energy security  risks, compounded by the global energy crisis. Attracting private  investment is essential to fund the large-scale projects needed in  the sector. In 2021, 62 percent of Armenia's total energy supply came  from natural gas, followed by oil (16 percent), nuclear (14 percent),  and hydro (5 percent), whereas the share of nontraditional renewable  energy sources (wind and solar) was only about 1 percent. 

"To ensure affordable, reliable, and clean electricity supply for  consumers, Armenia needs continued investments in modernizing the  power transmission network and improving the commercial viability of  the High-voltage Electric Networks of Armenia JSC, the transmission  company. Moreover, we expect this project to help reduce greenhouse  gas emissions - crucial for mitigating climate change," said Carolin  Geginat, World Bank Country Manager for Armenia.

The project aims to facilitate the integration of an estimated 1.1 GW  of renewable energy generation capacity into the transmission grid by  2032, which is enough to power over 690,000 households. This will  reduce the annual emissions of net greenhouse gas (GHG) by 540,000  tons. Additionally, it seeks to attract private investment totaling  $550 million, upgrade all transmission substations with automated  control and digital protection systems, and increase the total  capacity of transmission substations from 2,711 megavolt- amperes  (MVA) to 3,109 MVA. These efforts are part of a comprehensive  strategy to enhance renewable energy adoption, minimize environmental  impact, and modernize the grid for increased efficiency and  reliability. 

The project is part of the Europe and Central Asia Renewable Energy  Scale-Up Multiphase Programmatic Approach (ECARES MPA) Program, with  an overall financing envelope of $2 billion equivalent, which was  approved by the World Bank's Board of Executive Directors on March  28, 2024. The ECARES MPA is designed to increase renewable energy  capacity in participating countries of the Europe and Central Asia  region, support the acceleration of their renewable energy  transition, and achieve scale and impact through private investment,  while also fostering regional knowledge sharing.