The Armenian government, at its Cabinet meeting Thursday, approved the Caucasus Power Grid EU NPF Phase II grant agreement with the Reconstruction Loan Bank.

The explanation of the respective decision states that the objective of this project is to connect the Armenian and Georgian power systems with a 500/400/220 kV high-voltage direct current converter station-with a final capacity 1050 MW-located near the Georgian border in Ayrum (Armenia), The Caspian Post reports, citing Armenian media.

The connection on the Georgian side will be via a 500 kV overhead line from the substation in Marneuli, and on the Armenian side, via a 400 kV overhead line from the 400/220 kV substation in Ddmashen.

As a result, the Armenia-Georgia electricity exchange capacity is planned to be increased from the current 200 MW to 350 MW in the first phase, and subsequently, based on the demand of the regional market, to 1050 MW.

The construction of new overhead power lines will significantly improve the quality of service, significantly promote the development of regional mutually beneficial cooperation in the energy sector, and create a prerequisite for organizing parallel work with the power systems of the CIS countries.

The total available budget of loans and grants signed for the implementation of this project, excluding taxes, is 188.75 million euros, while the updated estimated cost for the implementation of the project, presented by the consultant in November 2024, is 542.75 million euros.