CJSC "Electric Networks of Armenia": The total volume of investments by 2030 will be more than $500 million
By 2030, we plan to increase the total investment volume to 461 billion drams – more than $500 million. Armen Arshakyan, Director for Finance and Economics of Electric Networks of Armenia CJSC, stated this at a meeting with journalists on February 14.
He explained that the total volume of investments in order to improve the quality of supplied electricity would be increased to 160 billion drams, and for connecting new subscribers and expanding the capabilities of the network - up to 171 billion drams.
Arshakyan added that funds will also be invested to reduce the level of technical and trading losses.
For comparison, the company representative cited the figures for 2002-2015, when the annual volume of investments averaged 5-16 billion drams, which were directed not to the development of the system, but to its maintenance.
“But from 2016 to 2023, the total volume of investments amounted to 235 billion drams - an average of 35 billion drams annually excluding value added tax. If the level of technical and trading losses in 2002-2003 was 21%, now this figure is 6.6%. As a result of reducing electricity losses, it is possible to save 14 billion drams annually for the system, as a result of optimizing the company - 3.6 billion, reducing operating costs - 2.7 billion drams,” he noted.
According to Arshakyan, in general, about 20 billion drams can be saved annually, which makes it possible to soften the tariff burden on consumers and not further increase this burden.
General Director of Electric Networks of Armenia CJSC Karen Harutyunyan, in turn, admitted that there are problems, noting that it is impossible to immediately reconstruct the entire network and instantly achieve results.
He emphasized that improvements must occur in parallel with investments, and solving the problem with one-time investments in order to achieve drastic changes will lead to a sharp increase in social problems.
“Our investments are targeted. The company will do everything to improve the quality and efficiency of supplied electricity. Since 2016, the volume of investments has grown fivefold on average per year, this is an unprecedented figure for the power system. Investments are made not only at the expense of raised funds, but at the expense of the company’s profits. Since 2016, international financial organizations began working with our company, which made it possible to attract loan funds at a price much lower than the market price. All these funds were raised without government guarantees, that is, they created an additional burden on the state budget,” Harutyunyan said.
He recalled that Electric Networks of Armenia CJSC issued bonds worth 32 billion drams in December, which were distributed faster than expected. “This became the largest bond issue in dram terms in the country. In monetary terms, 36.1% of bonds were purchased by banks, 53% by pension funds, and 10.8% by retail investors. In total, the number of investors is 311, of which only 14 are banks and institutional investors, 297 are individuals and other legal entities. The bonds will be available on the stock exchange, and everyone will be able to purchase them on the secondary market,” the head of the company emphasized.
He assured that the financial stability of the company is at a very high level, citing the indicators of the Moody's agency, which assigned the CJSC a B2 rating - the highest in Armenia. “There are 2-3 companies in the region with the same rating,” concluded Karen Harutyunyan.