KfW may credit Yerevan hydro plant modernization

KfW may credit Yerevan hydro plant modernization

June 11 2004

Yerevan. June 10 (Interfax) – ZAO International Energy Corporation
hopes to receive a credit of 15 million euros from Germany’s
Kreditanstalt fuer Wiederaufbau by the end of 2004 to modernize
Yerevan Hydroelectric Plant, plant Deputy General Director Mels
Akopyan told Interfax.

He said that representatives from KfW are currently discussing this
project with IEC General Director Mikhail Mantrov in Moscow.

Akopyan said that the German bank is waiting for the question of
guarantees to be resolved before providing the credit. He said that
he hopes that the credit will be provided under beneficial terms.

IEC has taken on the obligation of repaying a credit for 18 million
euros already received from KfW to restore the fifth and sixth
power-producing units at Kanaker Hydroelectric Plant, which is also
part of the Sevan-Razdan Cascade power plant. This credit was provided
to the Armenian government at the end of 2000 for 40 years at 0.75%
per annum, with a grace period of 10 years.

The Sevan-Razdan Cascade united six hydro plants build between 1930
and 1962 and is one of the main electricity producers in Armenia. The
plant has a capacity of 556 megawatts or about 18% of the total power
capacity of Armenia.

ZAO International Energy Corporation was set up at the start of
September 2003 by Unified Energy System of Russia to operate the Sevan-
Razdan plant. The company has a license from the Armenian commission
for the regulation of natural monopolies to produce electricity in
the country for 15 years.