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Who is our client

Electric Networks of Armenia CJSC is the client, established in Armenia as a closed joint stock company (ENA). ENA is the sole electricity distribution company in Armenia.

Funding objective

ENA has planned to invest USD 200 million during the period 2016-2020. The European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB) were mandated and each will fund USD 80 million thereof. ENA will fund the remainder from its cash flows. The investment objective and rationale are as follows: (1) the reconstruction and modernization of ENAs existing substations and lines and replacement of outdated equipment; (2) the expansion of the automated electricity metering system (reading and billing); (3 the expansion of the network and connection of new users; and (4) installation of a new automatic control system and other auxiliary investments. EBRD and ADB signed their loan agreements in July 2017. FMO intends to take a participation of USD 10 million under the EBRD syndicated loan agreement.

Why we fund this project

This Project has a good fit with FMO's strategy for the energy sector, which is includes the generation, transmission and distribution of electricity. These investments also contribute to a number of Sustainable Development Goals (SDGs), which are part of FMO's policies. This Projects contributes to the following SDGs: #7: affordable and clean energy (by way of: enabling better transport and distribution of electricity), #8: decent work and economic growth (through better, i.e. EBRD’s ESG-standards), #9: industry, innovation and infrastructure (with efficient transmission lines and smart distribution networks being key factors), #11: sustainable cities and communities (better transmission lines and distribution networks allow for cleaner, less pollutive environments), #12: responsible consumption and production (by better metering) and #13: climate action (enabling more production and tranmission & distribution of renewable energy).

Environmental and social rationale

FMO E&S category for this transaction is B+, reflecting health and safety risks to employees and communities, pollution (oil contamination at storage sites), and potential impacts on informal land users, biodiversity and cultural heritage. Explicit reference is made to EBRDs ex ante Disclosure and Project Summary Documents, which can be found on EBRDs website. FMO’s E&S DD indicates that the Project will have impacts consistent with the following IFC PSs: PS 1 - Assessment and Management of Environmental and Social Risks and Impacts PS 2 - Labor and working conditions PS 3 - Resource Efficiency and Pollution Prevention PS 4 - Community Health, Safety and Security PS 5 - Land Acquisition and Involuntary Resettlement PS 6 - Biodiversity Conservation and Sustainable Management and PS 8 - Cultural Heritage. IFCs PS 7 (Indigenous People) is not applicable as the project will not impact communities of indigenous people.

More investments

Date Total FMO financing
8/16/2021 USD 10.00 MLN
Europe & Central Asia
Signing date
Total FMO financing
USD 10.00 MLN
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)