WSHPDR_2013_Final_Report-updated_version

and a US$6 million grant. R2E2 has participated in the
financing of 27 small hydropower projects, 19 of which
are operational and 8 are under active construction. A
similar financing mechanism was enabled by KfW. The
German Armenian Fund of Renewable Energy (RES-
GAF) was established with capital of about €6 million
(about US$7.74 million). Unfortunately the industry
and the small hydropower projects are too large and
specialized for most Armenian banks.
Renewable energy policy
In 2007, a National Program of Energy Saving and
Renewable Energy was approved by the Government 9 .
It was an unprecedented move resulting in a crosssectoral
assessment of energy saving and renewable
energy potential in the Armenian economy as well as
recommended actions for optimizing it. Energy related
issues are regulated in the Energy Law and renewable
energy is covered by the Law on Energy Saving and
Renewable Energy. 10 The aim of the latter is to direct
and define state policy in a way that strengthens the
economy and energy autonomy of the country. 2
Legislation on small hydropower
The strategy of the energy sector development of the
Republic of Armenia was worked out and approved by
the Government in 2005. The small hydropower
Development Scheme was confirmed by the protocol
N3 of the Government of Armenia on 22 January
2009. 11
In September 2011, the Government made a decision
according to which a strategic development
programme of the hydropower sector in Armenia was
adopted; the programme included small hydropower.
Barriers to small hydropower development
There are many regulatory and legal barriers in
Armenia, these include: 5
Problems with Power Purchase Agreements
(PPA).
Concurrent term, licensing and water use permits.
Construction versus operational licence;
Ownership rights.
Land classification reform.
Lacking uniform and effective enforcement of
environmental legislation.
In addition there exist technical challenges:
Small hydropower equipment of low quality. There
are technical standards in place but it appears that
the standards are often compromised either by
negligence or design.
Low feed-in tariffs.
High import costs.
www.cia.gov/library/publications/the-worldfactbook/.
2. Babayan, Tamara, Areg Gharabegian, Artak
Hambarian, Morten Sondergaard and Kenell Touryan
(2011). Report: Renewable Energy Potential in
Armenia, 3 December. Available from
www.armenianweekly.com/2011/12/03/reportrenewable-energy-potential-in-armenia/.
Accessed
December 2012.
3. Electricity production by Armenia’s small
hydroelectric power stations increases four times over
past 5 years (2012). Arka News Agency, 20 April 2012.
Available from
http://arka.am/en/news/economy/electricity_produc
tion_by_armenia_s_small_hydroelectric_power_stati
ons_increases_four_times_over_pas/.
4. Karapoghosyan, E. (2011). Armenian Energy Sector
Energy Strategy Centre Yerevan. Armenia.
Available from
http://eneken.ieej.or.jp/data/3921.pdf. Accessed
December 2012.
5. Tetra Tech ES (2012). Small Hydro Power Sector
Framework, Status, Development Barriers and Future
Development: Assistance to Energy Sector to
Strengthen Energy Security and Regional Integration.
Yerevan. Available from
www.armesri.am/Public_Docs/DR/Task2/SHPP%20De
velopment%20Barriers_Eng%20(Update%202012).pdf
6. Armenia, Public Services Regulatory Commission.
(n.d.). Homepage. Available from www.psrc.am.
7. Armenia, Ministry of Energy (n.d.). Homepage.
Available from www.minenergy.am.
8. Armenia, Renewable Resources and Energy
Efficiency Fund (n.d.). Homepage. Available from
www.R2E2.am.
9. Scientific Research Institute of Energy for the
Alliance to Save Energy (2007). National Program on
Energy Saving and Renewable Energy of the Republic
of Armenia. Yerevan. Available from www.natureic.am/res/pdfs/documents/strategic/National%20Prog
ram_English.pdf.
10. Government of Armenia (2005). Energy Sector
Development Strategies in the Context of Economic
Development in Armenia: Adopted by the
Government of Armenia on 23 June 2005.
Available from www.natureic.am/res/pdfs/documents/strategic/Energy%20Strate
gy%20Final%20_Eng_.pdf
11. The Government Decision on the Approval of the
Strategic Development Program in the Area of Hydro
Energy of Republic of Armenia: 8 September 2011
decision No. 35.
References
1. Central Intelligence Agency (2012). The World
Factbook 2009. Washington, D.C. Available from
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