The consortium of the companies “Fotowatio Renewable Ventures B.V.” (Netherlands) and “FSL Solar S.L.” (Kingdom of Spain) won the tender for the construction of the plant. The Armenian government signed an agreement in 2018 with this consortium to support the organization and implementation of the project.
The company responsible for building the plant, Fotowatio Renewable Ventures (FRV), which is part of Abdul Latif Jameel Energy, will receive support from the International Finance Corporation (IFC), a member of the World Bank Group, the European Bank for Reconstruction and Development (EBRD), and the European Union (EU). They are extending up to USD 38.4 million in financing, structured in different tranches of debt.
Tristan Higuero, Chief Operations Officer of FRV, noted: "The signing of the financing deal for our first solar power plant in this region is of great significance for FRV, as it allows us to expand the geography of our operations. Through this project, we will contribute to the country’s sustainable economic growth by providing additional income sources and creating new jobs, paving the way for a more promising future."
The construction site was selected in Mets Masrik community of Gegharkunik Region, covering approximately 130 hectares. In the summer of 2019, the government recognized the area as having an exceptional public interest, allowing the appropriation of agricultural lands.
A year later, in September 2020, the 44-day Artsakh War began, delaying the construction of the plant.
"Our community is very dangerous from a geographical point of view. As a result of the war, most of the population of Mets Masrik lost their main income, which came from agriculture," Armen Asatryan, Mets Masrik Community Head, said.
According to Armen Asatryan, the community has a contract with "FRV Masrik" CJSC, by which the company is obligated to allocate 5% of its annual income to Mets Masrik for addressing socio-economic and other issues. However, during community hearings, residents indicated that the project’s risks were not sufficiently discussed, especially regarding the management of electronic hazardous waste. EcoLur sent a letter to the Ministry of Environment, but the ministry's response did not address this issue.
It should be noted that, according to the IFC (WB) Operational Policy (OP) 4.01 on Environmental Assessment, which is co-financing the project, this project is classified as Category B. Therefore, it requires an Environmental Impact Assessment (EIA) Report and Environmental Management Plan according to World Bank guidelines. The EBRD follows similar standards.
The EIA report for “Masrik-1” solar plant, issued on 17.07.2019, failed to meet the above requirements and was not aligned with the "green" economy direction adopted by Armenia. The report also lacked details on the recycling and disposal of solar panels, as Armenia does not currently have the necessary technology or standards for managing such waste. According to the EIA report, 165,368 photovoltaic panels with a capacity of 375 W each and 12 transformers were to be installed.
Additionally, the economic damage from losing fertile soil across 130 hectares was not assessed, nor was the potential economic benefit of the solar plant adequately compared to this loss.
Construction work resumed in mid-2022, even though the project was originally scheduled to be completed by July 1, 2022. By government resolution N 997-A dated June 30, 2022, the construction deadline was extended by one year to September 1, 2023, due to delays attributed to the COVID-19 pandemic and the war. An agreement was reached with the developer to extend the completion date, requiring an additional $1 million irrevocable security deposit if the project is not completed by the new deadline.
The tariff for electricity supplied from the plant has been reduced to USD 0.0415 per kWh, down from the previous rate of USD 0.0419 per kWh, excluding VAT.
In response to concerns raised by EcoLur, Armenia’s Deputy Minister of Environment, Tigran Gabrielyan, confirmed in a letter dated 05.10.2022 that due to the COVID-19 pandemic and the 44-day war, the construction of the plant was delayed until 2022. Resolution N 997-A extended the construction period to September 1, 2023.
EcoLur also addressed concerns to FRV representatives and international financiers, urging a new EIA considering the project's risks, including hazardous electronic waste and the impact on fertile lands. Additionally, it was highlighted that the plant's construction overlaps with the boundaries of candidate “Emerald” network areas, which is a cause for concern according to the Bern Convention.
In October 2023, the government amended the strategic program for the development of Armenia's energy sector, setting a target to increase renewable energy capacity to 2,000 MW by 2040, with 1,500 MW from solar and 500 MW from wind energy. As a result, the construction of “Masrik-1” photovoltaic solar power plant was postponed for another year, from September 1, 2023, to October 31, 2024. The proposed tariff for electricity remains USD 0.0419 per kWh, excluding VAT, with a penalty of $1 million for missing the commercial operation date. The developer has requested an additional extension of one month, setting a new date of December 1, 2024.
The current status of “Masrik-1” project will be covered in future publications by EcoLur.
The article was produced with the financial support of the Media Initiatives Center within the framework of "Expanding Production of Independent Content" grant project.
November 14, 2024 at 15:32