Challenge
Armenia’s transmission grid relied on aging Soviet-era infrastructure with frequent outages, equipment failures, and limited ability to meet growing domestic demand. These weaknesses affected electricity reliability, increased technical losses, and imposed costs on households and firms. Modernizing substations and rehabilitating transmission lines were essential to ensure stable, safe, and uninterrupted service, reduce system failures, and safeguard economic productivity. Frequent transmission-level outages also caused production disruptions for industrial and commercial enterprises, reducing operational continuity and raising business costs.
Approach
The World Bank supported Armenia with a sequenced, investment-focused approach centered on improving the reliability and safety of the high-voltage transmission network. The financing enabled the rehabilitation of critical substations and transmission lines, replacing obsolete equipment, upgrading the systems that protect the grid, and allowing operators to manage it safely, lowering the risk of equipment failures. The World Bank also helped the transmission company improve planning, safety, environmental practices, and day-to-day maintenance, focusing on the parts of the grid that caused the most outages, to achieve the largest improvements in reliability. Working closely with development partners ensured that all upgrades followed consistent, high-quality engineering practices. This long-term engagement helped High Voltage Electric Networks (HVEN) adopt modern operational and safety protocols, strengthen institutional capacity, and reduce system vulnerabilities. Through these targeted investments, the World Bank contributed to a more stable transmission network able to provide reliable electricity to households and industry.
Results
Outcomes of the Electricity Supply Reliability Project include Reliability and system performance significant improvement, including:
- Outages on targeted transmission line sections reduced by 57 percent;
- Breakdowns at key substations dropped significantly by 50 percent, improving day-to-day reliability;
Outcomes of the Electricity Supply Reliability Project, Electricity Transmission Network Improvement Project include:
- Network capacity and operational safety successful enhancement, including Yerevan Thermal Power Centre (YTPC), Ashnak, and Ararat-2 substations recorded zero equipment failures in their final reporting year;
- Transmission capacity doubled at Ashnak and Ararat-2, and increased by 36 percent at Yerevan Thermal Power Centre, which can now carry more electricity, helping the grid stay stable during high-demand periods.
The projects directly benefited the entire population and key institutions:
- By the project closing, the whole country (over 3 million people) benefited from improved service reliability;
- A dedicated Environmental and Social Unit was established within High Voltage Electric Networks (HVEN) and long-term safeguard and compliance capacity was strengthened.
Contribution to World Bank Group Targets and Jobs
The projects contributed to improved economic productivity by reducing electricity outages and equipment failures, which previously caused production interruptions for businesses. Construction and rehabilitation works supported short-term jobs, while improved system reliability helps sustain long-term employment in industry and services. The strengthened transmission network also improves the investment climate by lowering operational risks for firms that depend on stable electricity.
