UAE Company to Invest $300 Million in Armenia’s Renewable Energy Sector

By Emilio Luciano Cricchio

A UAE based company has vowed to invest $300 million in the solar power sector, as Armenia aims to diversify its energy sector.

The agreement was struck between the UAE’s renewable energy giant Masdar and the Armenian National Interests Fund (ANIF), during Armenia’s President Armen Sarkissian’s trip to the UAE on Saturday.

Furthermore, Gulfnews reports that the Armenian government has announced it will work to produce 30% of its energy needs from renewable energy sources by 2025.

The deal regards the development of 400 megawatts of capacity with the construction of a solar photovoltaic station with a capacity of 200 megawatts being the first step.

David Papazian, the CEO of ANIF, who was a signatory of the agreement remarked that, “Armenia has small and mid-size solar photovoltaic plants already in operation, with a combined capacity of 50MW, (with) another 250MW worth of solar projects licensed for construction, and a total of 700MW planned”.

Armenia receives an estimated 1,720 kilowatt-hours (kWh) of solar energy per sq m, compared with an average of 1,000kWh per sq m in Europe. Many of Armenia’s 200-plus rivers and lakes are also suitable for floating solar power projects, said Papazian according to Albawaba, a Dubai-based news website.

“I believe this cooperation will be successful not only in making Armenia greener but will also be useful in making Armenia’s energy system more balanced,” said Armenia’s President Armen Sarkissian at the signing ceremony.

The President reminded investors that Armenia is also a gateway market saying, “Armenia (should be viewed) as a platform for entering the big market of the Eurasian Economic Union.”

Analysts will see this as a key stepping stone in Armenia’s energy transformation, as the government aims to reduce Armenia’s dependence on foreign imported gas, mainly from Russia and Iran.

Issues with regards to the energy sector have been a constant headache for the government since independence in 1991, especially as Armenia has virtually no reserves of fossil fuels.

43% of internally produced energy comes from the Metsamor Nuclear Power Plant which is due for decommissioning in 2026. This is coupled with several thermal power plants which produce harmful greenhouse gases. Thus the Armenian government and investors have turned to solar power as an answer to Armenia’s energy woes, noting that Armenia has an abundance of sunlight all year round.

The main issue with solar power however is the high cost of installation. Foreign direct investment such as this newly struck deal with Masdar are the sort of assistance Armenia needs to develop a robust renewable energy sector.

In light of this, Masdar’s CEO Mohammed Jameel al Ramahi expressed eagerness to share expertise and cooperate with Armenia, pointing out the “considerable untapped potential,” Armenia’s renewable energy sector had.

Prime Minister Nikol Pashinyan too demonstrated his government’s commitment to diversifying Armenia’s energy sector during his official visit to Italy, where in an interview with il Corriere della Sera he stated, “Today the meaning of (the) word “energy” is changing very quickly. Very soon the key energy supplier of Italy and all the other countries will be the sun. Consequently we must take into consideration the facts and the future.”