The project will receive a $35.4m debt financing package comprising two $17.7m long-term loans from IFC and the EBRD
The European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC) and the European Union (EU) have partnered with Fotowatio Renewable Ventures (FRV) to support the development of a 55MW solar project in Armenia.
Located in Mets Masrik municipality, Gegharkunik Province, the solar power plant will be the first utility-scale solar power plant in Armenia and in the Caucasus.
FRV, which is part of Abdul Latif Jameel Energy will receive a $35.4m debt financing package comprising two $17.7m long-term loans from IFC and the EBRD.
The EU will allocate a €3m ($3.4m) investment grant through EBRD, for the project.
FRV said that the IFC financing package will include $8.9m financing from IFC’s own account and a $8.9m funding from the Finland-IFC Blended Finance for Climate Program.
Upon completion, the solar project is expected to generate over 128GWh of clean electricity per year while offsetting approximately 40,000 tonnes of carbon emissions annually.
The solar project includes a 9km transmission line
FRV Middle East and Africa managing director Mikel de Irala said: “Armenia has great potential when it comes to the development of renewable energy, in particular solar energy, and the country is a strategic priority for FRV.
“The financial close of our first solar project in the Caucasus region is a milestone for FRV and it allows us to expand our reach and continue leading the utility-scale solar power industry worldwide.
“In connection with this project, we are extremely proud to contribute to the country’s sustainable economic growth, local generation of wealth and local employment, thus helping to build a more sustainable future.”
Under a power purchase agreement, the electricity generated from the facility will be sold to Electricity Networks of Armenia, a utility responsible for distribution of electricity.
The solar project is expected to boost the renewable energy supply in Armenia and will also help to reduce its reliance on imported fuels.
It also includes development, construction and operation of a 9km transmission line.
Recently, Harmony Energy and FRV announced the commissioning of their first utility-scale energy storage project at Holes Bay, Poole, Dorset in the UK.