The government of Armenia has approved an agreement related to construction of the 76-MW Shnokh hydropower plant on the Debed River in the province of Lori, news agencies are reporting.

According to a report from Arka, the project cost is estimated at $150 million and construction of the hydroelectric facility is “part of a strategy to ensure energy security of the nation.”

The Shnokh project will be developed and owned by Debed-Hydro LLC and will involve the construction of 22 km of tunnels.

The facility is to be built with public and private funding. The Armenian Investors Club is involved with the project. This club is a non-public contractual investment fund founded in January 2017.

According to the Investors Club of Armenia’s website, the project will have a construction period of three years and a payback period of 13 years with an internal rate of return of 7.26%. Shnokh will have a depreciation period of 50 years, with a tariff (VAT included) of US$0.078 per kilowatt-hour and annual electricity supply of 300 million kWh. The total investment amount (VAT included) is $150 million, of which the club will provide $22.5 million.

This plant has been under investigation for some time. In 2008, HydroWorld reported that Armenia was inviting expressions of interest from consultants to perform a feasibility study of a project called Shnogh, then with an anticipated capacity of 70 MW.

The Armenian Weekly says hydroelectric plants produced nearly one-third of Armenia’s electricity in 2016, compared with 20% a decade ago.