On March 19, in the presence of Armenian government representatives, German Ambassador Busch, Commissioner Kos, and representatives from KfW and European Investment Bank, two new financing agreements worth €135 million were signed by Armenian Minister of Finance Hovhannisyan, and KfW Director Garcia Del Arco for the financing of the Caucasus Transmission Network project.
The agreements include a €120 million loan provided by KfW with risk cover from the German Federal Government, alongside a €15 million grant from the EU Neighbourhood Investment Platform. These new commitments complement previous grant and loan financing provided on behalf of the German Government and the European Commission, bringing total support to € 313.2 million. The EIB is also co-financing the project with currently €10 million.
Regarding the significance of these agreements, the Minister of Finance of the Republic of Armenia stated:
“Today’s signing of the Loan and Grant Agreements represents an important milestone in the implementation of the Caucasus Transmission Network Project and in strengthening regional energy cooperation. This Project will contribute to a more reliable, efficient, and interconnected power system in the region, enhancing cross-border electricity exchange and improving energy security. We highly value this cooperation with KfW, the Government of Germany, and the European Union, and are confident that the successful implementation of this project will further strengthen regional connectivity and contribute to the sustainable development of the South Caucasus.”
The committed resources, aimed at strengthening Armenia’s energy security and independence, will expand renewable energy generation across the country and enhance the regional integration of Armenia’s power market through the Caucasus Transmission Network. The project will enable reliable, flexible, and mutually beneficial cross-border energy exchange across the South Caucasus. Moreover, Armenia will gain access to the European grid.
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“One of the key pillars of our bilateral cooperation is to support Armenia’s regional integration and the development of Armenia’s energy sector. We want to contribute to its resilience, efficiency and sustainability by increasing grid stability and by developing renewable energy. Both Chancellor Merz and Prime Minister Pashinyan have included energy cooperation in the Joint Declaration on the Strategic Agenda between Germany and Armenia which they signed in December last year” stated Claudia Busch, German Ambassador to Armenia.
“With this investment, we are putting our money where our mouth is and proving to Armenia that we’re serious about its energy resilience. The Caucasus Transmission Network is a priority investment, enhancing regional integration of the power market while strengthening Armenia’s energy security and independence. These connections are more than just infrastructure; they are a pathway to greater renewable energy solutions and diversified partnerships with neighbouring countries,” said EU Commissioner Marta Kos.
This increased financial allocation demonstrates that cross-regional connectivity remains a shared strategic priority.
https://link.europa.eu/rWxrXG
