2. “Electricity Supply Reliability Project - Additional Financing”

3. TERMS AND CONDITIONS OF INVESTMENT FUNDS
Loan agreement for “Additional Financing of Electricity Supply Reliability Project” has been signed on August 6, 2014 between the International Bank of Reconstruction and Development (World Bank) and the Government of RoA in the framework of which a Loan at the extent of USD 40 mln. has been provided to “High Voltage Electric Networks“ CJSC.
The Loan has been provided with the following conditions:
The Annual interest rate is: Libor + WB variable spread + commission payment 1%.
The principal amount repayments are equally semiannual installments from August 15, 2024 up to February 15, 2039.

4. Project Objectives
Increasing the reliability and power of overhead transmission lines.
Reconstruction of “Haghtanak” substation transmuting it into 220/110/10 kV key substation. Construction of new 110 kV OSY. Replacement of two 63 MVA descending transformers with two 125 MVA autotransformers.
Reconstruction of “Cahrentsavan-3” and “Vanadzor-1” substations with the purpose of implementation of objectives foreseen by the “Electricity Supply Reliability Project-Additional Financing” Project.
Procurement of Specialized Machinery and Heavy Vehicles with the aim of improving the exploitation .

5. Project Implementation Deadlines
The completion of Project is foreseen at the end of 2018, in the framework of which will be reconstructed:
“Haghtanak” 220/10 kV substation
“Charentsavan” 110/10 kV substation
“Vanadzor-1” 110/10/6 kV substation

6. EXPECTING RESULTS FROM THE PROJECT
In the result of reconstruction, 220/10 kV “Haghtanak” substation will become 220/110/10 kV key substation.
It is expected:
Load replacement from 110kV OTLs, feeding from 220/110/10 kV “Shahumyan-2” substation to 220/110/10 kV “Haghtanak” substation which will decrease the load of overloaded transformers of “Shahumyan-2” substation.
To increase reliability of power supply of consumers in the central and southern regions of Yerevan.
To increase the reliability of Power grid.
To reduce the amount of emergency outages caused by equipment breakdowns.
To reduce operation costs.

7. In the result of replacement of worn out and obsolete equipment during the reconstruction of 110/10 kV “Charentsavan – 3’’ substation it is planned to reduce the amount of emergency outages caused by equipment breakdowns, to increase the reliability of Power grid and power supply of consumers, as well as to reduce operation costs. “Charentsavan – 3’’ 110/10 kV substation was built in The installed capacity of the substation is 50 MVA. The substation is located 37 km from Yerevan. Total area of the substation is 4,4 hectare.

8. In the result of replacement of worn out and obsolete equipment during the reconstruction of 110/10/6 kV “Vanadzor-1’’ substation it is planned to reduce the amount of emergency outages caused by equipment breakdowns, to increase the reliability of Power grid and power supply of consumers, as well as to reduce operation costs. 110/10/6 kV “Vanadzor-1’’ substation was built in It was finally reconstructed in The installed capacity of the substation is 160 MVA. The substation is located 125 km from Yerevan. Total area of the substation is 3,6 hectare.

9. In the framework of “Electricity Supply Reliability Project-Additional Financing” Project it is also foreseen Procurement of Specialized Machinery and Heavy Vehicles, in the result of which will be improved the operation works, will be increased the efficiency of failure elimination works, will be reduced the duration of failure elimination.

10. “Electricity Supply Reliability Project -Additional Financing”
The impact on Electricity tariff in the result of Project Implementation
Project name
“Electricity Supply Reliability Project -Additional Financing”
mln dram
159.4
411.8
443.8
2,038.3
2,008.7
1,979.1
1,949.5
1,919.9
1,890.3
Impact on tariff
0.0234
0.0605
0.0652
0.2996
0.2952
0.2909
0.2865
0.2822
0.2778

11. The impact on Electricity tariff in the result of Project Implementation