Short description of the overall project

The Project’s objective is to support Armenia’s efforts to ensure adequate and reliable electricity supply through improvement of the financial standing of the state-owned power generation companies and the private power distribution company.

Short description of activities financed by the donation

The project is planned the provide improvement in the financial viability of the state-owned power generation companies (ANPP and YTPC) through:

• Reduction of the cash deficit of ANPP and YTPC,
• Prohibition of non-core business related expenditures by The Ministry of Energy Infrastructures and Natural Resources as the sole shareholder of YTPC and ANPP,
• Full repayment of the commercial loans of ANPP and YTPC;
• Amendment of the methodology of tariff margin calculation for distribution company (ENA) by Public Sector Regulatory Commission (PSRC) to allow its margin for each new tariff period to fully reflect the loss (revenue) accrued due to difference between the forecast and actual cost of electricity purchased by during the preceding tariff period;
• Amendment of the methodology of tariff calculation for nuclear and thermal power generating plants by PSRC to allow tariffs for each new tariff period to fully reflect the loss (profit) resulting from difference between forecast and actual cost of purchased fuel due to fluctuation of foreign exchange rate during the preceding period.