By Atom Markarian
Experts from the Renewable Energy and Power Efficiency Management Foundation are convinced that the rise in gas prices will not affect the demand for local heating systems working on gas. Director Tamara Babayan cited calculations of the Foundation’s experts showing that on the contrary as a result of the rise in the price of natural gas due on April 10 it will become more advantageous for the population to use systems of centralized than individual heating.
“Taking into account that wholesale and retail gas tariffs are differentiated, residents will once again consider the possibility of using a common boiler-house, which will cost them less than heating their apartments individually,” Babayan said.
The organizers of Friday’s press conference dealing with the issue outlined the programs through which the Armenian government is going to encourage private investments in the so-called heating market with the assistance of international donors. The U.S. Government has granted about $3 million through the U.S. Agency for International Development to assist projects in this sphere, and the World Bank, in its turn, has issued a preferential loan of $15 million to the Armenian government to encourage investments by companies implementing local heating projects.
The Foundation’s experts estimate that investments of $200 million to $400 million are needed for the total restoration of the central heating system. “With assistance from donors the state is taking the first step to convince private investors that investments here are more profitable,” Babayan says.
However, specialists say that investments alone are not enough to solve the problem. They say residents of multi-apartment buildings themselves should be interested and involved in the projects to ensure their success. According to Babayan, the number of those interested in the projects is large and continues to grow.
“On the other hand, a great number of residents have individual heating systems installed in their homes, and trying to convince them to join the common network is inexpedient both technically and financially,” the Foundation’s director says.
According to Babayan, the government will use the World Bank credit to issue loans at an annual interest rate of about 6 percent to private banks in Armenia, which, in turn, will issue loans at annual interests rates of 10 to 12 percent and for a period of 7 years to companies that sign contracts with condominiums or separate buildings for building or reconstructing their centralized heating systems. Separate buildings or condominiums are also eligible to apply for a bank loan for installing heating systems.
Babayan says the tariff for the local network heat supply will be a maximum of 14 drams calculated per one kilowatt of electric power.