YEREVAN, December 9. / ARKA /. The German KfW bank will provide Armenia with $85.2 million euro loan for the first phase of the Caucasus Power Lines I project, the Armenian ministry of finance said today.

It said an agreement to that end was signed by Armenian finance minister Gagik Khachatryan,  the head of  KfW’s Energy  Department Ian Blum and the head of Armenian High-Voltage Electrical Networks company  Aram Ananyan.

The ministry said 75 million euros will be provided by KfW and 10.2 million euros by the German government.

The project is designed to unite Armenian and Georgian energy systems by building a high-voltage direct current ( HVDC) line in Armenian Ayrum,o n the border with Georgia. Due to the to-be-built  new substation and transmission line, Armenian and Georgian power grids  will work in the same mode allowing electricity swaps.

The total cost of the first phase of the project  105.2 million euros. This phase is co-financed by the European Investment Bank ($10 million euro loan) and the EU Neighbourhood Investment (a $10 million euro grant).

The German KfW bank has been assisting Armenia in the implementation of various projects since 1995.

Its representation opened in the country in 1998. KfW ‘s activities in Armenia are focused on energy, water,  financial and banking systems as well as private sector.

In 2012, Armenia and Georgia started the construction of a 400 kV power line that will link the Marneuli substation in Georgia with Hrazdan hydroelectric power station in Armenia. The new power transmission line will be used to ship Georgia-generated electricity to Iran via Armenia.-0-