Water and Energy

SECURE AND SUSTAINED ACCESS TO ENERGY AND WATER RESOURCES


USAID has helped Armenia to achieve measurable progress in the energy and water sectors. Physical infrastructure upgrades have been accompanied by institutional and regulatory reform – especially in the energy sector – that have increased transparency, accountability and self-reliance. As a result, both sectors are better managed today, services are becoming more stable and reliable, and this has raised business confidence and improved political and economic stability. In sum, the core first stage reforms supported by USAID and other donors worked.

Today, our programs are focused on completing the next stage of reforms, on institutional development of the governing and regulatory bodies, and on ensuring the delivery of safe, reliable, affordable and accessible public services. Proper management of Armenia’s natural resources is also critical to the country’s economic growth and sustainable development. USAID’s objectives include: (a) enhancing Armenia’s energy security; (b) ensuring that there is the critical infrastructure needed for economic growth and job creation; (c) improving the quality of life of ordinary Armenia’s through better utility services, and (d) developing sustainable utility systems.


ENERGY

Despite significant success in reforms, Armenia’s energy sector remains weak. Armenia is dependent on imported natural gas and nuclear fuel for approximately 75% of its energy needs. Access to the supply of these resources through the Caucasus, Iran and Central Asia is hampered by continuing political disputes. Further, links to Russian resources are problematic due to instability in southern Russia and problems with the Georgian energy sector. Moreover, Russian interests are now major owners of power facilities in Armenia and Georgia. The existing dilapidated heating systems cannot meet consumer needs and are not cost-effective. Heating costs account for 50% of the peak demand for electricity and are a burden for up to 80% of Armenia’s households.

Of special interest is Armenia’s nuclear power plant, Metzamor. A major source of the country’s electricity, with an operating capacity of approximately 400MW, Metzamor does not meet western safety standards. The United States and European Union have been pressing the Government of Armenia to retire the plant. However, recent studies indicate that power plant’s shut down would cost Armenian consumers $100 million per year in additional energy costs, which they cannot afford given the current economic situation.

USAID’s program is helping Armenia to develop an efficient, reliable and cost-effective energy sector which will support its emerging market economy. This is critical for sustainable economic growth, environmental protection and social welfare. To help Armenia achieve this, USAID’s energy program supports efforts to (1) increase private sector participation; (2) promote economic and environmental efficiency; (3) diversify energy sources; and (4) regulate the sector.


WATER

Armenia’s drinking water and wastewater infrastructure is deteriorated, irrigation systems are degraded, and it major water resource, Lake Sevan, is over-exploited. There is pollution of potable water sources, lack of rational allocation of water resources, and inadequate management of trans-boundary waters. The absence of effective national and regional systems to monitor water quality and allocate water flows threatens the ecology and health of downstream communities, and inhibits efforts to promote economic and political cooperation in the region.

USAID’s on-going water sector reform and restructuring activities are broadly designed to support the development of an efficient and sustainable integrated water resources management system. The program focuses on strengthening the institutional and financial sustainability and operational efficiency of selected Armenian water sector entities to assist them in playing a more effective role in serving the needs of their constituencies.


CURRENT ACTIVITIES

Program to Strengthen Reform and Enhance Energy Security in Armenia: improving the effectiveness and transparency of the energy sector management institutions as well as supporting increased energy security.

Armenian Energy Sector Partnership: furthering commercialization of state-owned energy entities, increasing energy efficiency through consumer education and the introduction of new technologies, and promoting energy security through diversification of energy resources, including renewable energy projects.

School Heating Project: reconstructing and rehabilitating the heating systems and lavatories in 40 schools across Armenia.

Commercialization of Energy Efficiency Project: supporting the development of energy sector SMEs able to develop and implement EE activities.

Institutional and Regulatory Strengthening of Water Management: supporting institutional strengthening and transparent operation of the key Armenian water management and regulatory institutions.

South Caucasus Water Project: increasing regional cooperation in the sustainable and effective management of shared water resources.

Rehabilitation of water supply system of Artashat town and 27 surrounding villages: the work includes both the sign and rehabilitation of the water supply network for the region