World Bank Allocates $40 Million for Modernization of Armenia’s Energy System

Armenia will receive a $40 million loan from the International Bank for Reconstruction and Development (IBRD), part of the World Bank Group, to modernize key energy infrastructure facilities. The corresponding agreement, signed in August 2024, is under review at a plenary session of Armenia’s National Assembly on January 22.

According to Kristine Galechyan, Deputy Minister of Territorial Administration and Infrastructure, the funds will be used to upgrade three critical electrical substations: Shamyan-2, Marash, and Yeghegnadzor, managed by High Voltage Electric Networks CJSC of Armenia.

All three facilities, constructed in the 1960s and 1970s, hold strategic importance for the country’s energy system. The Shamyan-2 substation, with a capacity of 250 MW, has been operational since 1964, Marash with 375 MW since 1978, and Yeghegnadzor with 126 MVA since 1966. The equipment at these sites has been in use for over 40 years and requires urgent modernization.

The project involves the installation of advanced microprocessor-based relays to replace outdated relay protection systems, as well as the reconstruction of reinforced concrete structures, trenches, and ground supports. The loan will be provided with a 25-year repayment period, including a 15-year grace period.

Galechyan noted that this initiative is part of the Enabling the Energy Transition program, aligned with Armenia’s Energy Sector Development Strategy until 2040. She also highlighted that the country has previously secured funding for similar projects from the Asian Development Bank and Germany’s KfW Bank.

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