YEREVAN (Armenpress/RFE/RL)–The World Bank approved Wednesday a Renewable Energy Project for Armenia totaling $25,050,000. The amount includes a $5 million International Development Association (IDA) credit and a $3 million grant from the Global Environment Facility (GEF). The project will also be supported by co-financing of $3 million from the Cafesjian Family Foundation.
This project will assist the government in increasing privately owned and operated power generation utilizing renewable energy and to reduce greenhouse gas (carbon dioxide) emissions.
Although Armenia has achieved remarkable results in reforming its energy sector–a few challenges remain. Armenia must shift its reliance from costly and polluting sources of energy to lower cost and environmentally friendly alternatives. Also–Armenia needs to diversify its energy sources and utilize indigenous renewable energy resources.
While the overall legal and regulatory framework in Armenia is supportive to the development of renewable resources–private investmen’s in renewable projects are impeded by a number of legal–regulatory–informational–financial–and institutional barriers. The Renewable Energy Project will provide assistance to remove the existing barriers and debt financing–as well as technical–legal–managerial and business support to a selected number of renewable projects.
"The project will increase the role of renewable resources in Armenia’s electricity generation mix in the future thereby increasing the diversification of electricity supply and energy security," said Gevorg Sargsyan–Head of the World Bank team designing the project. "It will also generate environmental benefits by reducing emissions and pollution."
World Bank officials also discussed anticipated repercussions of the upcoming surge in the price of Russian natural gas on Armenia’s population and economy.
Roger Robinson–head of the World Bank office in Yerevan–predicted that the doubling of the gas price–which is due to take effect this Saturday–will mainly affect the cost of electricity generated by thermal power plants–as well as the cost to heat households using gas heaters–usually poorer families.
"While the raising of the gas price in Armenia will have some negative impacts on certain parts of the economy and will hurt the budgets of some people–my personal feeling is that the overall impact will not be as severe as some people believe or fear," Roger Robinson said,
He said–however–it was difficult discuss more precisely the effects of Russia’s decision because of ongoing talks over the price.