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Armenian Hydropower Infrastructure And Financial Services To Benefit

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  • Armenian Hydropower Infrastructure And Financial Services To Benefit

    ARMENIAN HYDROPOWER INFRASTRUCTURE AND FINANCIAL SERVICES TO BENEFIT FROM GERMAN LOAN
    by Natalia Leshchenko

    World Market Research Center
    Global Insight
    May 19, 2008

    Armenia's Finance Minister Tigran Davtian and German Ambassador to
    Armenia Andrea Viktorin signed an agreement on 16 May giving Armenia
    some 74 million euro ($117US million) in fresh low-interest loans
    designed to improve its energy and water infrastructure and financial
    services, Radio Liberty reports. The largest share of the loans, 64
    million euro, will be used to upgrade Armenia's largest hydro-electric
    plant Gurmush, and build two high-voltage power transmission lines
    in the country's northern region Shirak and further into Georgia to
    create a joint South Caucasus electricity transmission system that
    could potentially be linked to Russia and Iran at some point. Another
    6 million euro is to be used to develop Armenia's expanding mortgage
    banking sector, the second such instalment from Germany.

    Significance:The loans, repayable in 40 years, will be disbursed
    by Germany's government and state-owned bank KfW in the next two
    years. Germany's assistance to Armenia since 1993 has amounted to
    almost 340 million euro. Both the hydropower plant and the transmission
    networks currently belong to Russian company UES as a result of
    privatisation deals; new resources and associated improvements should
    have a positive effect on the company's performance, as well as the
    energy infrastructure in Armenia.
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