US power generator ContourGlobal has signed a historic deal with the Republic of Armenia to buy three hydro power plants in the south of the country.
The acquisition represents the largest single US private investment in Armenia’s history and the first US investment in Armenia’s energy sector.
The company will invest more than approximately £35million over the next six years in a refurbishment program to modernise the plants and improve their operational performance, safety, reliability and efficiency, creating up to 300 jobs in the long term.
The plants, with a total electricity capacity of 405MW form part of the Vorotan hydro electric facility, on the Vorotan River, in southern Armenia.
ContourGlobal also announced that the International Finance Corporation, a member of the World Bank Group, has acquired a 20% interest breathe new life into Vorotan Hydropower Cascade project.
The project aims to enhance electricity supply reliability and strengthen the country’s power sector.
Vorotan accounts for roughly 15% of the installed capacity of Armenia’s electricity system and provides sufficient energy to power 250,000 homes.
ContourGlobal will supply power to the Armenian grid under a long-term power purchase agreement.
Chief executive Joseph Brandt said the company is committed to being an effective partner for the Republic of Armenia.
“We thank the Government for the trust they have placed in us and look forward to making a significant and lasting contribution to a key part of the country’s infrastructure. We also are very pleased to build upon our nearly decade-long cooperation with the IFC investing together in development projects across the globe.”
Armenian Minister of Energy and Natural Resources, Yervand Zakharyan, said: ” ContourGlobal’s planned investment will improve the stability, security and performance of the Armenian power system for many years to come.”
“Private sector participation can play an important role in addressing key infrastructure challenges in Armenia, and this transaction is an important step in that direction,” said Tomasz Telma, IFC Director for Europe and Central Asia.
Vorotan will contribute to ContourGlobal’s renewable energy portfolio, which currently comprises approximately 1000 MW of hydro, wind, solar and biogas production in Latin America, Europe and Africa. The company currently owns and operates approximately 1220 MW of power generation businesses in Austria, Italy, Bulgaria, Ukraine, Romania and Poland.
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