World Bank

Armenia: World Bank Supports Implementation of Government’s Urban
Heating Strategy

/noticias.info/ WASHINGTON, July 12, 2005. – The World Bank’s Board
of Directors today approved an Urban Heating Project (UHP) for
Armenia in the amount of US$15 million. The project will support the
implementation of the Government’s Urban Heating Strategy for
multi-unit apartment buildings and will improve heating in urban
schools.

The development objective of this four-year project is to increase
the use of clean, efficient, safe and affordable heating technologies
in urban schools and multi-unit apartment buildings. The project will
achieve this objective by removing barriers and creating market
conditions for the commercial provision of heating services;
providing long-term financing to service providers and consumers for
their investments in heat supply systems and energy efficiency
measures; building the capacity of local financial institutions in
financing heat supply and energy efficient systems to ensure
sustainability after project closing; promoting efficient and safe
boilers, heaters, and equipment to meter and control fuel and heat
consumption; and stimulating the creation and effective functioning
of self-regulating community organizations.

`We do hope that with the joint efforts of the Government of Armenia,
the World Bank, and other donors involved in the sector, that by the
completion of this Project the foundation for the sustainable
development of commercial heating services in Armenia will be laid,’-
said Gevorg Sargsyan, head of the World Bank team designing the
Project.

The Project combines investment, line of credit and technical
assistance financing:

· The technical assistance component will be targeted at community
and private sector mobilization and development of an enabling
environment for effective and safe provision of heating services,
including the improvement of the legal and regulatory framework, the
development of safety norms and standards, and the certification of
suppliers and equipment, capacity building of heat service providers,
local financial institutions, and home owner associations,
implementation of broad information campaigns and public education
programs, etc.

· Investment financing for heating of residential buildings will be
supported under two subcomponents. The first subcomponent consists of
lending to heat providers, home owner associations, municipalities
and individual home-owners for heating infrastructure investments. It
is estimated that about 7,000 households in multi-apartment buildings
without access to operational heating services would benefit from
these investments. The second subcomponent consist of capital grants
to finance investments for the connection of gas, heat and hot water
supply to the apartments of the poor households. Roughly 10,000 poor
households are expected to be provided with a basic level of service
from clean heat sources.

· Installation and/or rehabilitation of gas-based local heating
systems for schools. Roughly 100 schools will receive funding under
this component. The primary focus of this component will be on urban
schools outside Yerevan.

The project will also be supported by a US$ 2.9 million co-financing
Grant from the UNDP/GEF project `Improving the Energy Efficiency of
Urban Heating and Hot Water Supply in Armenia’, which is designed as
technical assistance complementing the WB project.

The Credit will be made to Armenia on standard IDA terms, including
40 years maturity and a 10-year grace period.

Since joining the World Bank in 1992 and IDA in 1993, commitments to
Armenia total approximately US$896 million for 40 operations.