YEREVAN (ARKA)—The German KfW Bank will provide Armenia with 51 million euros worth of loans for the reconstruction of a series of vital hydro-electric power plants on the Vorotan River in Armenia’s southern province of Syunik.
The loan to refit the Vorotan Cascade was secured through an agreement signed Thursday between Armenia’s Finance Minister Tigran Davtian and KfW President Eva Witt. The project is set to begin in 2011, lasting until 2015.
The Vorotan Cascade consists of 3 hydroelectric power stations that play a primary role in Armenia’s energy system, providing energy to the south of Armenia while supporting the water needs of the region.
According to a KfW press release, the equipment in all three plants—the Tatev, Shamb, and Spandarian stations–will be replaced and upgraded, increasing safety and efficiency.
The first 29 million euro installment will be provided as part of an agreement on financial cooperation between Armenia and Germany signed in 2007-2008.
According to Davtian, part of the loan is repayable within 40 years and has a ten year grace period. The remaining funding will be provided by the KfW bank with a 15 year payback term and 4 year grace period. The loan was given to Armenia at a 2% interest rate.