US power generation firm ContourGlobal has agreed to acquire the 405MW Vorotan Hydro Cascade on the Vorotan River in Southern Armenia for US$180M.
The company signed an agreement with the Government of Armenia to acquire and modernize the complex, which consists of a series of three hydroelectric power plants.. The cascade is one of the largest and most flexible power generating facilities in Armenia and the Caucuses.
This acquisition represents the largest single US private investment in Armenia's history and the first US investment in Armenia's energy sector. The Vorotan Hydro Cascade accounts for roughly 15% of the installed capacity of Armenia's electricity system and provides sufficient energy to power 250,000 homes.
Under the terms of the agreement, ContourGlobal Hydro Cascade, a direct and wholly owned subsidiary of ContourGlobal, will own and operate the three hydroelectric facilities located on the Vorotan river and will supply power to the Armenian grid under a long-term power purchase agreement. ContourGlobal will also invest $70M over the next six years in a refurbishment program to modernize the plants and improve their operational performance, safety, reliability, and efficiency. ContourGlobal expects the modernization to create 150 near-term jobs in addition to the 150 long-term technicians employed at the plants.
"Our signing of this agreement is the culmination of approximately two years of fruitful collaboration with the Government of Armenia and its agencies," said Joseph C. Brandt, ContourGlobal's President and Chief Executive Officer. "We are thrilled to have the opportunity to play an integral role in the Armenian power system and to make a significant and lasting contribution to a key part of the country's infrastructure. I look forward to working together with the Government of Armenia towards a successful conclusion of this transaction."
The acquisition will add to ContourGlobal's growing presence in Eastern Europe, where it owns power generation facilities in Bulgaria, Ukraine, Romania, and Poland, and will contribute to ContourGlobal's renewable energy portfolio, which currently comprises approximately 1000MW of hydro, wind, solar and biogas production in Latin America, Europe and Africa.
