Armenia’s Energy Transition and Electricity Transmission Network Upgrades Supported by the World Bank

Washington, June 3, 2024 — The World Bank’s Board of Executive Directors has approved $40 million in financing to support Armenia’s Energy Transition Project, which will help implement the Republic of Armenia’s Energy Sector Development Strategy through 2040. The investments will primarily focus on rehabilitating electricity transmission substations, implementing reforms that will enable the national transmission company to access private financing, and promoting the modernization of the energy sector as well as regional energy cooperation among emerging and developing economies across the Europe and Central Asia region.

Armenia’s energy sector remains highly dependent on imported fuels, particularly natural gas, creating significant energy security risks that have been further exacerbated by the global energy crisis. Attracting private investment is essential to finance the large-scale projects required by the sector. In 2021, 62% of Armenia’s total energy supply came from natural gas, followed by oil (16%), nuclear energy (14%), and hydropower (5%), while non-traditional renewable energy sources (wind and solar) accounted for only about 1%.

“To ensure an affordable, reliable, and clean electricity supply for consumers, Armenia must continue investing in the modernization of its transmission network and improve the commercial sustainability of the High Voltage Electric Networks of Armenia CJSC. We also expect this project to help reduce greenhouse gas emissions, an important contribution to climate change mitigation,” said Carolin Geginat, World Bank Country Manager for Armenia.

The project aims to integrate an estimated 1.1 GW of renewable energy generation capacity into Armenia’s transmission grid by 2032, enough to supply electricity to more than 690,000 households. The initiative is expected to reduce annual net greenhouse gas (GHG) emissions by 540,000 tonnes. In addition, the project seeks to mobilize $550 million in private investment, modernize all transmission substations with automated control systems and digital protection technologies, and increase the total transmission substation capacity from 2,711 megavolt-amperes (MVA) to 3,109 MVA. These measures form part of a comprehensive strategy to accelerate renewable energy deployment, reduce environmental impact, and modernize the transmission network to improve its efficiency and reliability.

The project is part of the Europe and Central Asia Renewable Energy Scale-up Multi-Phase Programmatic Approach (ECARES MPA), a regional financing program with a total envelope of $2 billion, approved by the World Bank Board of Executive Directors on March 28, 2024. The program aims to expand renewable energy capacity across participating countries in Europe and Central Asia, support their transition toward renewable energy, achieve significant results through private-sector investment, and promote regional knowledge sharing.

Click below to access the source article on the official World Bank website :

https://www.worldbank.org/en/news/press-release/2024/06/03/armenia-s-transition-to-clean-energy-and-power-transmission-grid-upgrades-to-benefit-from-world-bank-support?fbclid=IwZXh0bgNhZW0CMTAAAR0_gzR8ebijeN4L1aIgxDE0_cOi-YWFx0r3gEFPluYAKwgnN-2qeAbFrkQ_aem_AXXKPObO9pHyJjxIB32suDHZGDWcrzc1r4Yz5_Ov9ftdf6DTE8Bz5_pbpONpxsB69j9mtzTlNSINq3oDG2UZVl9o#:~:text=Washington, June 3, 2024 —,of the Republic of Armenia