Spain’s Fotowatio Renewable Ventures (FRV) has reached a financial close for the largest utility scale solar power plant in Armenia with the World Bank Group’s International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD) and largest Armenian universal lender Ameriabank.

The 55 MW Masrik-1 Solar Farm is to produce enough clean energy to supply more than 20,000 homes and avoid the emission of over 40,000 tonnes of CO2 annually, said FRV, part of Saudi Arabia’s Abdul Latif Jameel Energy and a global developer of renewable energy projects.

For the investment in Mets Masrik municipality, Gegharkunik region, the IFC, EBRD and EU will together extend up to $38.4mn in financing structured in different tranches of debt, while Ameriabank will provide an Armenian dram loan facility to finance the company’s VAT needs. The EU capital will come in the form of an investment grant, mobilised by the EBRD.

“Armenia has great potential when it comes to the development of renewable energy, in particular solar energy,” said Tristan Higuero, chief operations officer of FRV. “The financial close of our first solar project in the region is a milestone for FRV as it allows us to expand our reach worldwide. Through this project, we will contribute to the country’s sustainable economic growth through the generation of wealth and employment, helping to build a more sustainable future.”

Masrik-1 will generate more than 128 gigawatt-hours of electricity annually at a competitive tariff of $41.9/MWh. The electricity will be sold under a power purchase agreement to Electric Networks of Armenia, the utility company responsible for distribution of electricity in the country.

The project has signed a power purchase agreement (PPA) with Electric Networks of Armenia which will distribute the electricity produced by the plant.

In 2018, FRV and the Ministry of Territorial Administration and Infrastructure signed a government support agreement (GSA) to design, finance, build, own and operate the solar power plant with the support of the Renewable Resources and Energy Efficiency(R2E2) Fund, the implementation agency authorised by the Armenian government.

Artak Hanesyan, Ameriabank’s chairman of the management board-CEO, said that renewable energy projects are a priority for the lender: “We support international business in Armenia and have prioritized this project for its role in economic development, addressing environmental issues, creation of new job opportunities and improvement of the living standards in our country.

“We provided a loan to support development of the largest utility-scale solar power plant thus contributing to formation of a more independent and secure power system in Armenia”.

Hanesyan said Ameriabank has already financed hydropower plant (HPP) and solar power plant (SPP) projects: “Masrik-1 solar power plant is yet another daring and critical project for our country which, I am sure, will be a success due to our joint efforts,” he added.

Fady Jameel, deputy president & vice chairman of Abdul Latif Jameel, said: “Abdul Latif Jameel Energy, through FRV, is providing Armenia’s largest utility scale solar plant which is a testament to our commitment to developing the renewable energy sector. In finalizing this financial agreement for Masrik Solar Farm, we move closer towards our objectives and take pride in assisting Armenia’s shift towards a renewable future”.