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Masdar, a subsidiary of Abu Dhabi's Mubadala Investment Company, signed an agreement with the government of Armenia to develop a 200-megawatt solar photovoltaic plant, which will be the West Asian nation's largest utility-scale solar facility.
The Ayg-1 project will be developed on a design, finance, build, own and operate basis and will be 85 per cent owned by Masdar, with the state-owned Armenian National Interests Fund holding 15 per cent. The plant will span over five square kilometres and create several direct and indirect jobs.
The agreement was signed on Friday by Mohamed Jameel Al Ramahi, chief executive of Masdar, and Armenia's Minister of Territorial Administration and Infrastructure Gnel Sanosyan in the capital Yerevan.
“This agreement marks a milestone on Armenia’s clean energy journey and the development of this project will support the nation’s sustainable economic development,” Mr Al Ramahi said in a statement.
“We look forward to working with the Armenian National Interests Fund on further opportunities in this field and leveraging the experience we have gained as a global leader in renewable energy projects to support the diversification of Armenia’s energy mix.”
Masdar — named Energy Company of the Year for the third time at this week's Gulf Business Awards 2021 — has more than doubled the capacity of its renewable energy portfolio in two years. It is now investing in or committed to projects with a total generation capacity of at least 13 gigawatts.
Aiming to strengthen the UAE’s position as a world leader in green energy, it operates in over 35 countries with a total investment of about $20 billion and is looking to develop new projects in Malaysia, Vietnam, Indonesia and Taiwan.
The company, rated A2 and A+ by Moody’s Investors Service and Fitch Ratings, respectively, is also considering new opportunities in Uzbekistan, Kazakhstan and Azerbaijan.
Armenia is looking to increase the share of renewables in its energy mix and reduce its dependence on imported oil and gas. The country also has significant solar energy potential, with an average annual solar energy flow per square metre of horizontal surface of about 1,720 kilowatt hours, compared with the average European figure of 1,000kWh.
In July, the Armenian government announced that Masdar was the winning bidder for the project, submitting a tariff of $0.0290 per kWh in a competitive process.
“The gradual increase of renewable sources in our country's energy system is one of the priorities set by the government of Armenia,” Mr Sanosyan said.
“We regard this co-operation with Masdar as an important step towards this goal as well as towards endorsing Armenia's investment potential.”
He added that the signing marks the start of a “fruitful and lasting co-operation” between Masdar and Armenia for more projects in the future.
“The UAE and Armenia are united in our commitment to take positive action against climate change while creating greater economic opportunities, and this project marks a key stage in Armenia’s clean energy journey and our hopes for this project to serve as an exemplary success to attract opportunities for Armenia from the UAE,” Ahlam Rashid Ahmed Al Abd Al Salami, chargé d’affaires of the UAE embassy in Armenia.
In October, Masdar and Iraq’s Ministry of Electricity and National Investment Commission signed an agreement that implements the first phase of solar projects that will boost the country's goal of generating 20-25 per cent of its energy from renewables, equivalent to 10-12 gigawatts by 2030.
The agreement, a sign of strengthening ties with the UAE under the government of Iraqi Prime Minister Mustafa Al Kadhimi, will build power stations in five locations across Iraq that will generate 1GW. The second phase of the agreement will add another 1GW of capacity.
In August, Masdar inaugurated Uzbekistan's 100MW Nur Navoi solar plant, the country's first project to be developed on the basis of an independent power producer model, which will be able to power 31,000 households and offset 150,000 tonnes of carbon dioxide on an annual basis.