KfW to provide Armenia with 135 mln euros to sync power grid with Georgia
YEREVAN. March 13 (Interfax) - German state-owned bank Kreditanstalt fur Wiederaufbau (KfW) will provide Armenia with 135 million euros to synchronize its power grid with Georgia's in order to facilitate cross-border energy exchange in the Southern Caucasus.
The Armenian government said in a press release that it had approved the signing of a loan agreement with KfW for 120 million euros as part of the Caucasus Transmission Network Project, as well as a grant agreement with the bank for 15 million euros.
It wrote that the EU and Neighbourhood Investment Facility Caucasus Transmission Network Phase 2 project involved joining together the power networks of Armenia and Georgia through the construction of a high-voltage 500/400/220-kW transformer station in Armenia's Ayrum, near the Georgian border, as well as new electricity transmission lines.
On the Georgian side, there will be a 500-kW transmission line starting from the Marneuli substation, and a 400-kW line starting at the substation in Ddmashen on the Armenian side. As a result, the exchange of electricity will increase from the current 200 MW to 350 MW at the first stage and to 1050 MW later on, depending on demand from the regional market.
The Armenian government said that the construction of the new electricity transmission lines would allow the quality of services to be improved significantly, while incentivizing the development of mutually beneficial regional collaboration in the energy sector and providing a basis for working in parallel with the power networks of CIS countries.
The power networks of Armenia and Georgia currently function within different synchronous zones - Armenia's is synchronized with Iran's, and Georgia's with Russia.
Armenia's state budget for 2026 includes 45.6 billion dram or 103.5 million euros as funding for the project. Of this, 43.5 billion dram or 98.9 million euros are loaned funds and 2.1 billion dram or 4.6 million euros are co-financed.
The project is funded by the EU and the Neighbourhood Investment Facility (NIP).
