Armenia’s electricity transmission network faced significant challenges due to aging Soviet-era infrastructure. Frequent outages, equipment failures, and limited capacity hindered the system’s ability to meet growing domestic demand, reducing reliability and increasing costs for households and businesses. These weaknesses disrupted industrial and commercial production, threatened operational continuity, and highlighted the need for modernized substations and rehabilitated transmission lines to ensure stable, safe, and uninterrupted electricity service.
To address these challenges, the World Bank supported Armenia through a sequenced, investment-focused approach aimed at improving the reliability and safety of the high-voltage transmission network. Financing enabled the rehabilitation of critical substations and transmission lines, replacement of obsolete equipment, and upgrades to grid protection systems. The World Bank also helped the transmission company enhance planning, maintenance, and operational safety while ensuring that the most outage-prone parts of the network were prioritized. Collaboration with development partners ensured high-quality engineering standards, strengthened institutional capacity, and reduced system vulnerabilities, resulting in a more stable transmission network capable of reliably serving households and industry.
The Electricity Supply Reliability Project and the Electricity Transmission Network Improvement Project delivered measurable improvements in network performance. Outages on targeted transmission lines dropped by 57 percent, while breakdowns at key substations decreased by 50 percent, significantly enhancing day-to-day reliability. Transmission capacity was doubled at Ashnak and Ararat-2 substations and increased by 36 percent at Yerevan Thermal Power Centre, enabling the grid to handle high-demand periods more effectively. The projects benefited over three million people nationwide, established a dedicated Environmental and Social Unit within High Voltage Electric Networks (HVEN), and strengthened long-term compliance and safeguard capacity.
These upgrades also supported economic productivity by reducing disruptions to businesses and improving the overall investment climate. Rehabilitation works generated short-term employment, while improved electricity reliability underpinned sustained jobs in industry and services. Upgraded substations, such as Ashnak, allowed previously manual switching operations to be conducted quickly, safely, and with higher precision through new computerized systems.
Key lessons from the projects include the importance of identifying the most fragile parts of the grid to target improvements, coordinating work across substations to avoid supply disruptions during construction, and combining infrastructure upgrades with strengthened safety, maintenance, and environmental practices. These operational and institutional improvements ensure long-term asset performance and better grid management capabilities.
Building on these gains, the ongoing Armenia Enabling the Energy Transition Program-for-Results (EET PforR) aims to further strengthen HVEN’s operational and financial sustainability, modernize sector governance, and prepare the grid for emerging technologies such as battery storage. The program will fund additional substation upgrades, support modern tariff-setting, enhance distribution reliability, and develop planning tools for future energy needs. These efforts are intended to create a resilient, financially sustainable, and investment-ready energy sector aligned with broader goals of job creation, resilience, and sustainable infrastructure development.
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