The World Bank Board of Executive Directors approved on Wednesday, April 27 a $30 million loan for the Power Sector Financial Recovery Program-for-Results (PforR) for Armenia.

According to WB, this Project will support the Government’s efforts to maintain adequate and reliable electricity supply by improving the financial condition and governance of the state-owned power generation companies and the private power distribution company.

"Throughout the last five years, the state-owned generation companies have been experiencing a shortage of cash to finance key expenditures, because of lending and spending for purposes not related to their core business of generating and supplying energy. This is how the Armenian Nuclear Power Plant (ANPP) and Yerevan Thermal Power Pant (YTPC) have accumulated large cash deficits amounting to US$104 million which accounts to 80 percent of their total estimated revenues for 2015," the Bank said.

"If the financial difficulties of the ANPP and YTPC are not overcome, it will have significant impact on their ability to maintain the current levels of generation with resulting negative consequences on the cost and adequacy of electricity supply in the country. In 2012-2014, those two plants accounted for 42 percent of total annual electricity generated for domestic needs. Inability of ANPP and YTPC to generate power at current levels could push up the average cost of electricity supply and possibly cause an electricity deficit."

Armenia's Minister of Finance Gagik Khachatryan and World Bank’s Regional Director for the South Caucasus Mercy Tembon sealed an agreement on February 23, envisaging a $55 million loan with a 25 year maturity period and a 14.5 year of grace period.

The Local Economy and Infrastructure Development Programme loan agreement signed with the International Bank for Reconstruction and Development (IBRD) is set to improve infrastructure and institutional capacities to further boost tourism development in Armenia's Ararat, Vayots Dzor and Lori provinces.