The Asian Development Bank (ABD) has provided Armenia’s national power distribution network with an $80 million loan designed to further cut its substantial losses and make electricity supplies in the country more reliable.
“The investment will help the Electric Networks of Armenia (ENA) improve private sector electricity distribution in Armenia by reducing distribution losses from around 10% in 2016 to around 8% by 2021,” the Manila-based lending institution said in a statement released on Monday.
This will be achieved through “rehabilitating, reinforcing, and augmenting the distribution network, connecting new customers and introducing international standards of management and automated control system,” said the statement.
“The investment program will contribute to the government of Armenia’s goal of energy independence and energy efficiency,” Sonali Tang, a senior ADB executive, was quoted as saying.
ENA had incurred mounting losses since 2010, despite repeated increases in electricity prices approved by Armenian state regulators. The electric utility had $220 million in outstanding debts to Armenian power plants and commercial banks when it was acquired by the Tashir Group of the Russian-Armenian billionaire Samvel Karapetian from Inter RAO, a state-run Russian energy giant, in October 2015. Karapetian pledged to make the troubled utility “much better under our management.”
The most recent electricity price hike announced by Armenia’s Public Services Regulatory Commission (PSRC) in June 2015 sparked two-week demonstrations in Yerevan. They forced the Armenian government to keep the energy tariffs unchanged for most households and some small businesses through a subsidy.
The protests were driven by a widely held belief that Armenians are made to pay for widespread corruption within the ENA management. While defending the tariff rise, government officials acknowledged that the power grids have been mismanaged by the Russians.
The government stated over a year ago that the new owner has managed to cut ENA’s losses within months after buying the troubled network.