The European Union and two international lending institutions have formally approved about $39 million in funding for a Spanish company contracted by the Armenian government to build Armenia’s first large solar power plant.
The company, Fotowatio Renewable Ventures (FRV), won more than two years ago an international tender for the construction of the 55-megawatt plant in Mets Masrik, a village close to the eastern coast of Lake Sevan.
FRV signed a relevant contract with the Armenian Energy Ministry in July 2018. It said at the time that the facility will likely be built by the end of 2020. The construction has still not begun, however.
In a joint statement issued on Wednesday, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) said they each will lend FRV $17.7 million to finance the project strongly supported by the World Bank. They said the renewable energy company will also receive an EU “investment grant” worth 3 million euros ($3.4 million).
“The 55-megawatt power plant facility … will boost Armenia’s supply of renewable energy and will help the country reduce its reliance on imported fuels,” read the statement.
“Right now, nearly 70 percent of Armenia’s electricity generation depends on imported fossil fuels,” it said.“As the country’s demand for electricity grows, renewables are expected to provide a sustainable and low-cost alternative source of energy and the Masrik plant is designed to set an example for the rest of the Caucasus.”
The funding for the project was announced one week after the Armenian government approved a $9 million contract with the Russian company Kaskad-Energy to reconstruct an electricity substation located not far from Mets Masrik.
Minister for Local Government and Infrastructures Suren Papikian explained that the substation needs to be completely rebuilt in order to receive and transmit electricity to be generated by the planned solar plant. Papikian said that work on the plant will get underway “soon” but gave no specific dates.
Both the current and former Armenian governments have pledged to significantly increase the presently modest share of renewables in domestic electricity production. Deputy Prime Minister Tigran Avinian has said that the country could and should have up to 1,000 megawatts of solar power capacity by 2030.
The first Armenian solar power plant with a capacity of just 0.5 megawatts went on stream in September 2017. Six more such small plants were connected to the national power grid by November 2018. Armenian private firms began building more of them in the following months.
The Mets Masrik plant will be by far the biggest facility of its kind. According to FRV, it will occupy about 100 hectares of land and produce enough energy to power 21,400 households.