WB Financed Urban Heating Project

WB Financed Urban Heating Project

1.1 UHP Objective and Components

Recognizing the importance of strengthening the capacity of the heating sector in urban areas of Armenia and sustainable provision of affordable and high quality heating services to consumers the RA Government adopted Urban Heating Strategy (UHS) under its Decree 1384-N as of September 5, 2002. The UHS provides the strategic framework for the short-, medium- and long-term development of the Armenian urban heating sector.
The RA Government and IDA signed the UHP DCA (4102-AM) on July 20, 2005. The DCA was approved by the RA Constitutional Court as of October 3, 2005 and the RA National Assembly ratified it on November 11, 2005.
The International Development Association (through the DCA) provided a credit in the amount of US$ 15.0 million to the Republic of Armenia.
The objective of the Project is to increase the use of clean, efficient, safe and affordable heating technologies in multi-apartment buildings in Armenia. The project includes the following five components:

Component A. US$ 1.0 million
Development of enabling invironment for effective and safe provision of heating services including:

Development of regulations, safety norms and standards, and certification of suppliers and equipment, including for natural gas supply;
Improvement of legal and regulatory framework to make HOAs more functional and to foster market-based provision of heating services.
Capacity building of heat service providers, local financial institutions, and HOAs;
Implementation of broad information campaigns and public education programs;
Establishment of special advisory center(s). ;
Assistance in preparation of sub-loan projects.

Component B: US$ 7.2 million investment financing for heating of residential buildings will be supported under two subcomponents:

B.1 Lending to project beneficiarie (US$ 4.2 million)
It is estimated that about 7,000 households in multi-apartment buildings without access to operational heating services would benefit from these investments.

B.2 Capital grants to thepoor (US$ 3.0 million)
Eligible households will be identified based on their participation in the existing PFBP. It is estimated that roughly 10,000 poor households will be funded under this component.

Component C: School heating (US$ 5.0 million).
Roughly 100 urban schools will benefit from the installation and rehabilitation of heating systems within the scope of this component.

Component D: Support for project implementation (US$ 0.8 million).

Component E: Project preparation (US$ 1.0 million)