Armenia advances its energy resilience with extra €135 million in EU and German support

On 19 March, two new financing agreements worth €135 million were signed by Armenian Finance Minister Vahe Hovhannisyan and KfW Director Garcia Del Arco for the financing of the Caucasus Transmission Network project. 

The agreements were signed in the presence of EU Enlargement Commissioner Marta Kos, Armenian government representatives, German Ambassador Claudia Busch, and representatives from KfW and European Investment Bank.

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 €10 million.

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.

“With this investment, we are putting our money where our mouth is and proving to Armenia that we’re serious about its energy resilience,” said EU Commissioner Marta Kos. “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.” 

On 19 March, during her two-day visit to Armenia, Marta Kos also met with Armenian Prime Minister Nikol Pashinyan and Deputy Prime Minister Mher Grigoryan.

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Press release