ContourGlobal and Armenia have acquired the assets of the Vorotan hydroelectric facility, a series of three individual power plants with a total electrical capacity of 405MW on the Vorotan River in southern Armenia.
ContourGlobal also announced that the International Finance Corporation ("IFC"), a member of the World Bank Group, has acquired a 20% interest in ContourGlobal Hydro Cascade to help acquire, operate, and rehabilitate the Vorotan Hydropower Cascade. The project aims to enhance electricity supply reliability and strengthen the country’s power sector.
The acquisition represents the largest single U.S. private investment in Armenia’s history and the first U.S. investment in Armenia’s energy sector. The Vorotan Hydro Cascade accounts for roughly 15% of the installed capacity of Armenia’s electricity system and provides sufficient energy to power 250,000 homes.
Under the terms of the agreement, ContourGlobal Hydro Cascade will own and operate the three hydroelectric facilities located on the Vorotan River and will supply power to the Armenian grid under a long-term power purchase agreement. ContourGlobal will invest more than Euro 50 million over the next six years in a refurbishment program to modernize the plants and improve their operational performance, safety, reliability and efficiency. ContourGlobal expects the modernization to create 150 near-term jobs in addition to the 150 long-term technicians employed at the plants.
Mr. Brandt stated that the company is committed to being an effective partner for the Republic of Armenia.
"We are very pleased to announce the closing of the Vorotan transaction and that IFC will join us as an equity partner. We thank the Government for the trust they have placed in us and look forward to making a significant and lasting contribution to a key part of the country’s infrastructure. We also are very pleased to build upon our nearly decade-long cooperation with the IFC investing together in development projects across the globe."
Mr. Yervand Zakharyan, the Armenian Minister of Energy and Natural Resources, stated, "We are pleased to conclude this process with ContourGlobal, a proven and experienced owner and operator of power generating facilities around the world. We are confident that ContourGlobal will successfully own, maintain and operate this important power complex and are gratified by ContourGlobal’s planned investment, which will improve the stability, security and performance of the Armenian power system for many years to come."
"Private sector participation can play an important role in addressing key infrastructure challenges in Armenia, and this transaction is an important step in that direction," said Tomasz Telma, IFC Director for Europe and Central Asia. "The planned rehabilitation of the Vorotan Cascade will help improve access to energy and support Armenia’s energy self-sufficiency".
The acquisition will contribute to ContourGlobal’s renewable energy portfolio, which currently comprises approximately 1000 MW of hydro, wind, solar and biogas production in Latin America, Europe and Africa.