Total cost of Caucasus Power Lines program is 320 million euros

YEREVAN, March 16. / ARKA /. The total cost of the program "Caucasus Power Lines’ is 320 million euros, Armenian energy and natural resources minister Yervand Zakaryan said today.

He said the program will be implemented in three phases -the first was launched in 2014 and will end in 2018, the second phase will end in  2021 and the third in 2026.

In the first phase Armenian and Georgian energy systems will be united through a high-voltage direct current ( HVDC) line to be built in Armenian Ayrum on the border with Georgia. The  new substation and the transmission line will enable Armenian and Georgian power grids  to  work in the same mode and make electricity swaps.

The total cost of the first phase of the project  105.2 million euros. This phase is co-financed by the European Investment Bank (10 million euro loan) and the EU Neighborhood Investment (a 0 million euro grant).  Another 85.2 million euro loan will be provided by German KfW bank. The agreement with KfW was signed in 2014 December and the agreement with European Investment Bank was signed today in Yerevan.

'This project  will enable Armenia and Georgia to integrate their power grids and contribute to their economic development. We are also negotiating  a possible integration of the power grids with neighboring  Russia and Iran," said Zakaryan.

The head of  KfW’s Energy  Department Ian Blum said Armenia's high level  energy security depends largely on energy cooperation with neighboring countries, and a stable and strong system of transmission lines will bring the energy security of Armenia and Georgia to a new level.

He said the involvement of the EU and the European Investment Bank in this program is evidence that  the EU as a major donor is willing to continue to assist Armenia both in the framework of investment projects and development programs.

The KfW loan will be provided in two tracnhes -75 million and 10.2 million euros. The first is repayable in 15 years with a five-year grace period and the second is provided for a period of 40 years  at  0.75% interest rate.-0-