Two new financing agreements worth €135 million have been signed to support Armenia’s Caucasus Transmission Network project.
The deals were signed on 19 March by Armenia’s finance minister Vahe Hovhannisyan and KfW director Garcia Del Arco, in the presence of Armenian government representatives, German ambassador Claudia Busch, EU commissioner Marta Kos, and representatives from KfW and the European Investment Bank (EIB), according to a statement published by the European External Action Service (EEAS).
The package includes a €120 million loan from Germany’s development bank KfW backed by risk cover from the German Federal Government, plus a €15 million grant from the EU’s Neighbourhood Investment Platform.
These commitments bring total German government and European Commission support for the project to €313.2 million, including previous grant and loan financing.
The EIB is also co-financing the project with €10 million.
Hovhannisyan said the agreements marked “a milestone” for the project and for regional energy cooperation, adding that it would support a more interconnected power system and increase cross-border electricity exchange.
Power links and the European grid
The funding is intended to strengthen Armenia’s energy security and independence, expand renewable energy generation, and integrate Armenia’s power market more closely with the region through the transmission network, the EEAS reported.
It said the project would support cross-border electricity exchange across the South Caucasus and that Armenia would gain access to the European grid.
Busch said energy cooperation was included in a joint declaration on a strategic agenda signed by German Chancellor Merz and Armenian Prime Minister Nikol Pashinyan in December last year.
Kos said the Caucasus Transmission Network was a priority investment for regional integration of the power market and for Armenia’s energy security and independence.
