BANKS – PARTICIPANTS OF RENEWABLE ENERGY DEVELOPMENT PROGRAM TO BE
AMMOUNCED IN LATE AUTUMN
YEREVAN, JULY 22, NOYAN TAPAN. Staring late 2005, the KFW Bank
(Germany) will implement in Armenia a program on renewable energy
development to be financed by the German government. The program
envisages credits for the operating, half completed and new
hydroelectric power stations. According to the Armenian representative
of KFW Karapet Gevorgian, the program advisors will arrive in Armenia
in November to develop jointly with the Central Bank of Armenia (CBA)
the criteria for choosing banks – participants of the program and
organize the competition of banks. K. Gevorgian said that KFW Bank
will allocate a total of 7.5 mln euros for the purpose of providing
long-term credits for small hydro power stations. Out of the indicated
sum, 6 mln euros will be given as a concessional loan (carrying a
0.75% interest rate and repayable over 40 years), and 1.5 mln euros –
as a grant. With the aim of implementing the program, the
German-Armenian Fund-2 will be set up to re-credit the selected
banks-participants with these resources. K. Gevorgian assured that the
repayment terms of the loans provided within the framework of the
program will be longer and their interest rates – lower compared with
those of loans given to other spheres. The hydro power station
together with its infrastructures, as well as other property of the
owner may be put in pledge. However, in order to get a loan, the
recipient’s investment must make up at least 30% of the amount
required for restoration. According to K. Gevorgian, as it is a new
crediting sphere for Armenian banks, initially they will work with the
operating hydro power stations that have guaranteed cash flows.