Making renewable energy attractive for investment

Photo: Corwin Majer

Starting from 2002, a number of investment-focused activities were implemented as part of the UNDP Armenia Climate Change Programme. The first of these programmes was directed at the promotion of energy efficiency and reduction of greenhouse gases in the heating sector. The main sources of funding are the Global Environment Facility and the Green Climate Fund.

Mediamax interviewed Diana Harutyunyan – UNDP Armenia’s Climate Change Programme Coordinator – on their past and present projects.

Spreading the culture of rejuvenation

“As we were just beginning our work in this area, it was important for us to understand how it was possible to preserve the pre-existing central heating systems, whilst introducing new technologies to spread a culture of energy efficiency. Our pledge of success was the ability to engage private investors in the central heating reconstruction programme in Avan district ,” tells Diana Harutyunyan.

A private company made an investment of about $ 16 million to upgrade  a local energy production facility. The facility provides two products – electricity sold to the electric distribution network and thermal energy – supplied to residential buildings for hot water and heating supply.

Programme success and use of new methods

“The tariff  calculation methodology has been the most crucial component for the success of this programme,” noted the programme coordinator.

According to Diana, the output generated by the facility serves as an alternative to burning gas inside apartments. This is one of the main advantages for consumers. Unlike many countries, Armenia has no prohibitive legislation banning individual heating systems in buildings that already have central heating. This is considered as a key risk for private investments.

Sector attractiveness for investments

Diana reports that heating supply sector is an attractive niche for private investments as it provides a steady and growing source of income.
“We used to have functional  urban central heating facilities but they deteriorated as payments were not tied to consumption volumes, and therefore, insufficient to cover the maintenance costs. The quality of heating was poor, and there was no way to make residents pay for the volumes they consumed. The new system allows every apartment to act as a separate consumer and pay for the actual volume consumed.”

During the programme, assistance was given to the central heating system of Aparan, responsible for providing to several residential buildings. Additionally, assistance was offered by providing solar heaters for socially significant buildings, such as hospitals in Meghri and Goris, kindergartens in Kajaran, two childcare centers in Yerevan and one in Kapan.

Another facet of the programme was promoting the use of other energy-saving technologies for centralized heating. Specifically, a centralized pump technology was introduced in Ayb school, while an infrared heating system was installed in Hayordats Tun in Arabkir.

Diana Harutyunyan states that grant programmes of the Global Environment Facility are intended to open up the market, create new pathways and remove existing obstacles.

“It is clearly impossible to address all the needs our country faces through grant programmes only. However, inception is required to reveal and remove initial legal and organizational obstacles,” she emphasizes.

Siranush Yeghiazaryan


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