Investment Program

The technical conditions of the seven hydro power plants of the Cascade are quite different.

In September 2020, the “Fichtner” consulting company was contracted by the “International Energy Corporation” CJSC to conduct a thorough study for assessing the current state of the Sevan-Hrazdan Cascade. The following has been confirmed by the study: one of the plants of the Cascade is in a good condition (the Yerevan-1 HPP), while all the other hydro power plants require special measures and investments with short-term, medium-term and long-term works to ensure reliable, safe and stable operation with their design capacity. Two of the seven plants, i.e. the Argel HPP and the Yerevan-3 HPP, are in quite a critical state, they need urgent repairs and investments mainly to ensure safe operation.

The total volume of investments necessary for the provision of the safe operation of the hydro power plants of the Cascade is estimated at up to $ 182 million. Taking into account the great volume of these investments, this estimate has been reduced by the technical staff of the “IPC” CJSC, including only the most urgent works, as well as the abilities to carry out some of the work by their own resources. As a result, the staff of the “IPC” has calculated more realistic amount of investments at $ 83.5 million for the period of 2020-2027, which will allow to provide the smooth operation of the Cascade.

Moreover, according to the study conducted by the “Fichtner” company, it was proposed that deeper study should be conducted, which will take into account the economic justification of the expenses, the opportunities for the increase of production efficiency, and, consequently, will allow to thoroughly summarize the necessary medium-term investment plan.

Accordingly, the “IPC” CJSC has conducted negotiations with the International Finance Corporation (IFC), a member of the World Bank Group, which was ordered to conduct the mentioned study. The study of the possibilities of the reduction of water losses in the irrigation system, the calculation of the technical-economic substantiation of the actions aimed at their reduction, as well as the preparation of proposals for the improvement of the tariff methodology of the “IPC” CJSC, has been added to the subject of the study, which will give an opportunity to conduct more substantive negotiations with regulating bodies.

An agreement was signed with the “International Finance Corporation” as a result of negotiations in February 2021. As a result of the works, the medium-term program for 2020-2027 will be reviewed. 17 well-known companies have applied for participation in the international tender announced by the “International Finance Corporation”, and the winner of the tender will start conducting the study.

In order to ensure the regular process of the company's work, the company's investment program for 2020-2022 at the total amount of 21.9 billion AMD (about $ 42 million), including VAT, has been elaborated and submitted to a regulatory body and approved by the latter.

The mentioned program has included 94 arrangements, 8 of which have been connected with hydraulic turbine, hydromechanical and auxiliary equipment, 27 have been connected with the acquisition, replacement and installation of electrical technical equipment, 10 arrangements have been conencted with the acquisition, replacement and installation of relay protection equipment, 33 arrangements have been connected with the overhaul of hydro-technical constructions and installation of equipment, 10 - the acquisition of transport means and mechanisms and 6 have been connected with the acquisition of fixed assets to ensure the regular operation of the Company.

The mentioned investment program also includes the overhaul of the 2.8- km long Hrazdan Diversion Canal N 2 (which was put into operation in 1959), the replacement of power transformers N 1 and N 2 of the Hrazdan HPP (which operated since 1959 and 1960, respectively), the replacement of power transformers N1 and N2 of the Argel HPP (which operated since 1953), the replacement of power transformers N1 and N2 of the Arzni HPP (which operated in 1956 and 1957, respectively), and these works have included the installation of oil intake and oil collection systems, which have been separately foreseen for the Kanaker HPP.

The Tashir Group of Companies has committed to finance of a significant part of the investment program. The essential part of the rest of the amount will be financed at the expense of the incomes received by the "IPC" CJSC, and the rest part will be financed through credit means. Negotiations are being conducted with a number of international financial institutions for this purpose.