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New World Bank Loan To Improve Armenian Power Supplies


Armenia - An electricity distribution facility.
Armenia - An electricity distribution facility.

The World Bank has provided Armenia with a $52 million loan that will be used for modernizing key electricity transmission facilities in the country.

According to World Bank officials in Yerevan, the Armenian government will contribute $17 million of its own funds to the project designed to “improve the reliability of the power transmission network and system management.”

“This will allow avoiding increased incidence of power supply outages as well as associated significant social and economic costs,” Laura Bailey, the bank’s country manager for Armenia, told reporters on Tuesday.

Most of the funding will be channeled into two electricity substations located in Yerevan and Ashnak, central Armenia. The Yerevan facility built in 1965 is directly connected to a thermal power plant that accounts for around 20 percent of Armenian electricity output. In Bailey’s words, its rehabilitation is “essential” for all of the country’s 1 million or so electricity consumers.

Around 120,000 of those consumers are dependent on the Ashnak substation that went into service in 1983. The World Bank-led project envisages a complete replacement of its equipment.

The 25-year low-interest loan will also finance the creation of a “back-up dispatch center” of the Armenian power grid. As a World Bank statement explained, the new facility will be able to “immediately” replace the existing dispatch center in Yerevan in case the latter breaks down “due to technical or other reasons.”

The disbursement raised to over $2.1 billion the total amount of loans extended by the World Bank to Armenia since 1992.

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