Masdar, a UAE-based renewable energy firm, has signed an agreement with the Armenian government to develop the 200MW Ayg-1 solar photovoltaic (PV) plant in the Asian country with an investment of $174m.

The Ayg-1 project is expected to become the largest utility-scale solar plant in Armenia.

Masdar, which is a subsidiary of Mubadala Investment, will own a stake of 85% in the solar PV plant, as per the government support agreement signed by the parties.

The remaining 15% will be held by the Armenian National Interests Fund (ANIF), which is an Armenian government owned investment vehicle.

In July 2021, the Armenian government declared Masdar as the winning bidder for the Ayg-1 solar project. The Abu Dhabi-based firm prevailed in the bidding process by submitting a tariff of $0.029 per kilowatt-hour (kWh).

Masdar CEO Mohamed Jameel Al Ramahi said: “This agreement marks a milestone on Armenia’s clean energy journey, and the development of this project will support the nation’s sustainable economic development.

“We look forward to working with the Armenian National Interests Fund on further opportunities in this field, and leveraging the experience we have gained as a global leader in renewable energy projects to support the diversification of Armenia’s energy mix.”

The Ayg-1 solar power project is planned to be built between the Talin and Dashtadem communities. The project location is said to have high solar radiation while the land is unsuitable for agricultural purposes.

According to Masdar, the Armenian solar power plant will spread over 500ha and is expected to generate several direct and indirect jobs.

ANIF CEO David Papazian said: “We are glad to welcome Masdar into Armenia’s journey towards the decarbonization of the country’s energy supply. Ayg-1 is an ambitious step towards the fulfillment of this goal, and Masdar’s expertise and experience in the field is key to the success of the project.

“Ayg-1 is set to become a highly visible investment project, benefitting the country, its citizens and investors, while committing to highest sustainability standards in the industry.”

In October this year, the Iraqi government signed an implementation agreement with Masdar to develop 1GW of solar energy capacity in Iraq.