Vorotan Hydro Cascade
This summary covers a non-shareholder loan from a lender yet to be identified, as well as an associated interest rate swap, for the Vorotan Hydro Cascade project in Armenia. The lender would benefit from a MIGA guarantee of $90 million against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract. This is a joint project with the International Finance Corporation (IFC) and MIGA. Please click here to view the Summary of Investment Information posted by IFC for their investment in the project.
The project consists of the privatization of the brownfield 404.2 megawatts (MW) Vorotan hydroelectric cascade, which comprises three existing hydropower plants, as well as their associated reservoirs and dams located along the Vorotan River in southern Armenia. The plants have been in operation for the last three to four decades and currently represent around 17 percent of Armenia’s overall power production capacity.
The project is a category B under MIGA’s Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary prepared by the IFC for their investment in the project.
The project’s major expected development impact is the enhancement of the reliability of one of Armenia’s main sources of renewable energy, while supplying cost-competitive power to meet the country’s growing electricity demand. The project will also contribute to increasing fiscal and tax revenues for the Government of Armenia, and carry strong demonstration effects for private sector participation in the country’s energy sector.
MIGA’s involvement in this project is strongly aligned with the Agency’s priority area of supporting climate change and energy efficient projects, as outlined in Strategic Directions FY15-17. The project is also aligned with the World Bank Group Country Partnership Strategy FY14-17 in Armenia with the objective of ensuring adequate and reliable electricity supply in the country.