Delegation of the European Union to Norway

Caucasus Transmission Network Project

06/10/2016 - 15:19

The Caucasus Transmission Network Project (Stage 1) aims to provide a reliable, flexible and mutually profitable cross-border energy exchange within the South Caucasus by connecting the Armenian and the Georgian power grids. The project serves the regional integration of energy systems in the South Caucasus as well as with Iran and Russia. It addresses the Armenia's need for increasing its energy security.

Brief Description

The energy sector is key for the promotion of sustainable economic development. A reliable and secured energy supply at reasonable costs is one of the conditions precedents to attract investments. It also encourages people to set up their own business, which finally leads to jobs creation and indirectly to poverty alleviation. In addition, a stable and affordable energy supply improves the standard of living of the population by providing better access to basic services such as health, education, etc.

The currently different voltage levels of electricity in Armenia and Georgia need to be synchronized in order to realise this regional cross-border energy transfer technically. Without a synchronous voltage level between two countries, a reliable energy transfer is not possible. The grid synchronization can be achieved through the construction of a High Voltage Direct Current (HVDC) converter station in Armenia. The project will finance the construction of this specialised substation as well as the rehabilitation and construction of relevant transmission lines and another substation to allow a reliable regional energy transfer in the South Caucasus. 

Next to the above-mentioned technical investments, the project partner High Voltage Electric Networks (HVEN) will receive a technical assistance to ensure a successful project implementation.

The EU NIF contribution will not only ensure the overall financing, but has a positive economic impact on the project. The funds provided will ensure that potentially required end-user tariff increases for the Armenian consumers due to the large investments in the energy infrastructure are limited. Therefore, the EU NIF funds contribute to energy affordability especially for the poorer parts of the population.

Actions in Brief

The EU contribution through the NIF funds will ensure the following actions to finance and as result ensure a positive economic impact on the project. Finally resulting in limiting the potentially required end-user tariff increases for the Armenian consumers investments thereby will contribute to energy affordability especially for the poorer parts of the population.

  • Construction of a HVDC converter station (planned installed capacity 350 MW).
  • Rehabilitation and construction of transmission lines and substations (transmission lines of approximately 43 km and substation with 350 MW installed capacity).
  • Technical assistance for energy sector developments which are legally necessary to establish a cross-border electricity transfer such as transparent and clear energy market rules and tariff methodologies.

Duration: 29/12/2015 – 29/12/2020 (60 months)

Total project budget: EUR 188 200 000.00

EU contribution: EUR 10 000 000.00

Location: Ayrum, Alaverdi, Yerevan

Implementing Partners: High Voltage Electric Networks CJSC 

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