ELECTRIC NETWORKS OF ARMENIA TO RECEIVE 64.5 MILLION EURO FROM EBRD AND VNESHECONOMBANK
ARKA
June 17, 2009
YEREVAN, June 17. /ARKA/. European Bank for Reconstruction and
Development and the State Corporation the Bank of Development and
Foreign Economic Affairs (Vnesheconombank) will lend â~B¬ 64.5 million
to Electric Networks of Armenia.
Nadifa Farshad, EBRD director on energy affairs; Pyotr Fradkov,
deputy chairman of Vnesheconombank, and Valery Ovsyannikov, general
director and chairman of VTB Bank (Armenia) directorial board, signed
a relevant agreement on Wednesday.
The project implying modernization and rehabilitation of Armenia’s
electric grid will be financed through VTB Bank (Armenia). The money
will be lent for ten years at floating interest, which will be decided
at every stage of the project.
The program implies enhancement of electric power usage effectiveness.
The program also aims to lessen losses in electric networks and
intensify integration of CIS countries’ grids.
Under the signed agreement, EBRD will transfer â~B¬42 million
and Vnesheconombank â~B¬22.5 million to Electric Networks of
Armenia. Besides, another agreement was signed between creditors –
EBRD and Vnesheconombank – for regulating relations between them in
this project.
The money will be spent for financing Armenian Electric Networks’
investment program aimed at re-equipment and reconstruction of
infrastructures.
Fradkov stressed the importan ce of the deal."The transaction is
very important, since we have worked out an up-to-date and effective
mechanism for financing long-term and infrastructural projects in so
complicated financial situation", he said.
Expressing hope for success, Fradkov said that the gained experience
will be used in the future.
In his words, Vnesheconombank attaches special importance to the
project, since this is the first deal in Armenia.
Nadifa Farshad, the EBRD representative, stressed the importance
of the agreement as well saying this is the first transaction in
Armenia’s energy sector and the region and the first experience of
cooperation with INTER RAO UES and Vnesheconombank in the region.
She said that the credit is to be extended without state guarantees.
Farshad expressed hope that the deal would lay groundwork for long-term
cooperation with the bank’s partners in the region and improve energy
supply to consumers in Armenia.
European Bank for Reconstruction and Development is the investment
mechanism created by 60 countries and two international organizations
in 1991 for supporting market economy and democracy in 27 countries
from the Central Europe to the Central Asia.
The EBRD has invested â~B¬125 million in Armenia’s economy since 1992.
The bank is the largest investor to Armenia. Vnesheconombank was
established in 2007.
The bank focuses its activity on removal of infrastructural obstacles
to growth, modernization and development of non-materials, promotion
of innovations and support for small and mid-scale businesses.
Electric Networks of Armenia is the sole distributor of electric
energy to all consumers in Armenia.
The company has 323 substations, serves 830,000 users and the largest
employer in Armenia.
The company’s sales totaled â~B¬186 million and investments â~B¬29
million in 2008.The company is a subsidiary of Russian INTER RAO
UES.