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Armenia: World Bank Supports Implementation of Government’s Urban Heating Strategy

/noticias.info/ WASHINGTON, July 12, 2005. – The World Bank’s Board of Directors today approved an Urban Heating Project (UHP) for Armenia in the amount of US$15 million. The project will support the implementation of the Government’s Urban Heating Strategy for multi-unit apartment buildings and will improve heating in urban schools.

The development objective of this four-year project is to increase the use of clean, efficient, safe and affordable heating technologies in urban schools and multi-unit apartment buildings. The project will achieve this objective by removing barriers and creating market conditions for the commercial provision of heating services; providing long-term financing to service providers and consumers for their investments in heat supply systems and energy efficiency measures; building the capacity of local financial institutions in financing heat supply and energy efficient systems to ensure sustainability after project closing; promoting efficient and safe boilers, heaters, and equipment to meter and control fuel and heat consumption; and stimulating the creation and effective functioning of self-regulating community organizations.

“We do hope that with the joint efforts of the Government of Armenia, the World Bank, and other donors involved in the sector, that by the completion of this Project the foundation for the sustainable development of commercial heating services in Armenia will be laid,”- said Gevorg Sargsyan, head of the World Bank team designing the Project.

The Project combines investment, line of credit and technical assistance financing:

· The technical assistance component will be targeted at community and private sector mobilization and development of an enabling environment for effective and safe provision of heating services, including the improvement of the legal and regulatory framework, the development of safety norms and standards, and the certification of suppliers and equipment, capacity building of heat service providers, local financial institutions, and home owner associations, implementation of broad information campaigns and public education programs, etc.

· Investment financing for heating of residential buildings will be supported under two subcomponents. The first subcomponent consists of lending to heat providers, home owner associations, municipalities and individual home-owners for heating infrastructure investments. It is estimated that about 7,000 households in multi-apartment buildings without access to operational heating services would benefit from these investments. The second subcomponent consist of capital grants to finance investments for the connection of gas, heat and hot water supply to the apartments of the poor households. Roughly 10,000 poor households are expected to be provided with a basic level of service from clean heat sources.

· Installation and/or rehabilitation of gas-based local heating systems for schools. Roughly 100 schools will receive funding under this component. The primary focus of this component will be on urban schools outside Yerevan.

The project will also be supported by a US$ 2.9 million co-financing Grant from the UNDP/GEF project “Improving the Energy Efficiency of Urban Heating and Hot Water Supply in Armenia”, which is designed as technical assistance complementing the WB project.

The Credit will be made to Armenia on standard IDA terms, including 40 years maturity and a 10-year grace period.

Since joining the World Bank in 1992 and IDA in 1993, commitments to Armenia total approximately US$896 million for 40 operations.

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