Wind energy production




Business Model Description
Establish large-scale private wind power stations linked to the central grid of the Electrical Networks of Armenia and provide electricity at guaranteed price for revenue generation; or establish small-scale decentralized wind power stations with up to 0.5-MW to generate electricity for own use in households, businesses and communities.
Expected Impact
Promote wind energy production to increase income and resilience of SMEs and households, reduce use of fossil fuel and the country's environmental footprint, and improve its energy security.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
Disclaimer
UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.
The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.
Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.
Country & Regions
- Armenia: Gegharkunik
- Armenia: Lori
- Armenia: Syunik
- Armenia: Shirak
Sector Classification
Renewable Resources and Alternative Energy
Armenia is self-sufficient in energy generation but dependent on imported fuel (4). 85% of energy is from thermal and nuclear power plans, with negative environmental effects on soil, air and water. After closure of nuclear plants, the need for alternative energy will increase. Armenia has underutilized potential in renewable energy (4,400-4,900 GW/year) with 180 small hydropower plans (24, 25).
Energy security is a high priority in the Government agenda. Government policies promote the investment in renewable energy and energy efficiency technologies (1, 2, 3). These include the Scaling-Up Renewable Energy Program (SREP) and the Law on Energy Efficiency and Renewable Energy, which provide a sound foundation and principles for promoting sustainable energy practices.
To promote investment in renewable energy, the Government applies a number of programs, including feed-in tariffs in solar energy sector, tax advantages for investment in renewable energy, including small hydropower plants, solar and wind (2, 3, 7, 27).
Alternative Energy
The Government introduced feed-in tariffs for wind energy, which allows households to sell the excess electricity to the electric networks, and coupled it with subsidized financing in the subsector, which is expected to make wind energy projects feasible in Armenia in the mid-term perspective (2, 3, 7, 27).
Wind Technology and Project Developers
Pipeline Opportunity
Wind energy production
Establish large-scale private wind power stations linked to the central grid of the Electrical Networks of Armenia and provide electricity at guaranteed price for revenue generation; or establish small-scale decentralized wind power stations with up to 0.5-MW to generate electricity for own use in households, businesses and communities.
Business Case
Market Size and Environment
Annual renewable energy sector capacity of 4,400 - 4,900 GW.
Armenia's renewable energy sector capacity is estimated at 4,400-4,900 GW annually (24, 25, 26).
There are around 950 ha of land available under the category in the land cadaster as “objects of energy, transport, communication and utility infrastructures”, which can be used for establishing wind power stations (24, 25, 26).
Indicative Return
10% - 15%
The Semyonovka wind power plant is expected to have an IRR of 11.6% (28).
Investment Timeframe
Short Term (0–5 years)
According to stakeholder information, wind power stations can be built in less than five years, and start to produce cash flows as soon as the power station is connected to the network.
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Market - Volatile
Market - Volatile
Impact Case
Sustainable Development Need
Armenia depends on imported fuel to cover its electricity needs (4). 85% of energy is from thermal and nuclear power plants, with negative environmental effects on soil, air and water. After closure of nuclear plants, the need for alternative energy will increase. (24, 25).
Armenia has high potential for wind energy; there are an estimated 1000 km2 of land with good-to-excellent wind resource in Armenia. Assuming an output of 5 MW per km2, this area may provide 5,000 MW of potential installed capacity. Wind power is a renewable energy source, with possibility to produce at varying scale (6, 8).
Gender & Marginalisation
Women and children particularly suffer from unstable electricity supply, hampering for example educational opportunities.
Expected Development Outcome
Reduced use of fossil fuel in TPPs and reduced radioactive waste (also addressing the high cost of its treatment) thanks to greater renewable energy application overall.
Enhanced energy security, increased share of renewable energy, and reduced environmental footprint of Armenia's energy sector through the wind installations.
Gender & Marginalisation
Increased income for rural and marginalised communities thanks to stable energy supply.
Income generation opportunities for women engaged in the production of wind energy.
Primary SDGs addressed

7.2.1 Renewable energy share in the total final energy consumption
7.a.1 International financial flows to developing countries in support of clean energy research and development and renewable energy production, including in hybrid systems
7.b.1 Installed renewable energy-generating capacity in developing countries (in watts per capita)
Secondary SDGs addressed



Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Corporates
Public sector
Outcome Risks
Industrialization of wind power may increase the average electricity tariff since renewable energy has higher end tariffs, making it unaffordable for consumers.
Transportation and installation of wind systems can created significant levels of greenhouse gases.
Operating wind turbines may lead to negative sound and visual effects, especially disturbing wildlife, notably birds and bats.
Impact Risks
High capital costs for wind installations, and challenges in accessing financing, may limit the realisation of large installations, which will minimise the positive effects of the energy source.
Procedural difficulties related to allocation of land for building solar power stations may limit the realisation of solar installations.
Possible changes of the currently beneficial tariff for wind energy may discourage investors, leading to the non-realisation of installations.
Impact Classification
What
Investment in wind energy contributes to increasing income, independence and resilience of small- and medium-firms and households; higher share of sustainable energy, and less use of fossil.
Who
Small- and medium- enterprises and households benefit from improved resilience via infrastructure development and job creation.
Risk
The model is proven and the technology for wind power stations is readily available and affordable.
Impact Thesis
Promote wind energy production to increase income and resilience of SMEs and households, reduce use of fossil fuel and the country's environmental footprint, and improve its energy security.
Enabling Environment
Policy Environment
The promotion of renewable energy technologies and enhancing the renewable energy capacity, including wind energy production, are high priorities for the Government of Armenia, as outlined in the Government Plan 2019-2023 (1).
To enhance the capacities in renewable energy, the Government plans to support the creation of 60 MWT capacity in the next 2 years, which is in addition to the 55 MWt PV station already set up (2, 3).
Financial Environment
Financial incentives: Armenia offers various financial instruments, such as green leasing, that offer below market interest rates for renewable energy production. Beneficial tariffs are applied for renewable energy producers (2, 7, 8).
Fiscal incentives: Armenia extends tax privileges for importation of materials and equipment for the renewable energy industry, which also allows for extended VAT payment times for imported products (10).
Regulatory Environment
Energy tariffs are set by the PSR Committee and beneficial tariffs are applied for electricity from renewables (solar, wind and biofuel). The tariff for wind power is applied since 2018 (27).
Industrial wind power stations with power exceeding 500 kWt are subject to licensing by the Public Services Regulation Committee (30).
Based on the Commission Decree N 88-N of 22 April, 2015, in the end of every year the tariff for wind energy is indexed to reflect fluctuations in the national currency against USD. Tariffs for wind power plants with over 30 MW is reviewed under investment projects (32).
The Decree No 1030-L of 2018 enhances the capacities in renewable energy and assists with the implementation of private projects of wind power plants of about 300 MW (29).
Construction of a wind power station is permitted on the land categorized in the land cadaster as “objects of energy, transport, communication and utility infrastructures” (31).
Marketplace Participants
Private Sector
Wind power plants such as Semyonovka, Pushkin Pass (Lori Marz).
Government
Public Services Regulation Committee, Ministry of Territorial Administration and Infrastructure, Ministry of Environment.
Multilaterals
Several international financial institutions and multilateral banks support the promotion of renewable energy, such as the World Bank, European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ABD).
Non-Profit
Renewable Energy Producers’ Association Union of Legal Entities.
Public-Private Partnership
Active partnerships, such as the Government cooperation with the Spanish firm Acciona Energy Global SL and the UAE firm Access Infra Central Asia Limited, which also receives feasibility studies and investment support from the public.
Target Locations

Armenia: Gegharkunik
Armenia: Lori
Armenia: Syunik
Armenia: Shirak
References
- (1) Government action program 2019-2023, https://www.gov.am/am/Five-Year-Action-Program.
- (2) National program of energy saving and renewable energy of the Republic of Armenia, Government Protocol Decree No 2 of 18 January 2007, http://www.minenergy.am/page/493.
- (3) Development of the energy system of Armenia (until 2036), Government Protocol Decision No 54 of 10 December 2015, https://www.arlis.am;Development of the energy system of Armenia (until 2040), Government Decision No 48-L of 14 January 2021, https://www.arlis.am.
- (4) International Energy Agency (IEA), EU4Energy, https://www.eu4energy.iea.org/countries/armenia.
- (5) UN ESCAP SDG Help Desk, https://sdghelpdesk.unescap.org/re/armenia.html.
- (6) World Bank, Development Indicators, World Bank Data, https://data.worldbank.org/indicator/EG.EGY.PRIM.PP.KD?locations=AM-EE-CZ-EU-SI-LT-NL-DK-7E-Z7.
- (7) Public Services Regulatory Commission (PSRC), www.psrc.am.
- (8) Armenia Renewable Resources and Energy Efficiency (R2E2) Fund, http://r2e2.am/en.
- (9) The Law on Renewable Energy and Energy Efficiency, https://www.arlis.am/DocumentView.aspx?DocID=141298.
- (10) Tax Code, https://www.arlis.am/DocumentView.aspx?DocID=152750.
- (21) UNDP interviews with stakeholders, 2019.
- (22) National program of energy saving and renewable energy of the Republic of Armenia, Government Protocol Decree No 4 of 2 February 2017, https://www.arlis.am/Doc.
- (23) Concept implementing the provisions of energy security provision of Armenia (schedule for 2014-2020), President Decree No NK-182-N of 23 October 2013, http://www.minenergy.am/page/492;https://www.arlis.am/DocumentView.aspx?DocID=74450.
- (24) Armenia Renewable Resources and Energy Efficiency (R2E2) Fund, http://r2e2.am/en.
- (25) Ministry of Energy, Infrastructures and Natural Resources of the Republic of Armenia, http://www.minenergy.am.
- (26) Cadaster Committee of Armenia, https://www.cadastre.am/storage/files/pages/pg_7311379278_2019NaxnHanr_bal1.pdf.
- (27) Public Services Regulatory Commission (PSRC), www.psrc.am.
- (28) Semyonovka Wind Plant Project, http://uk.mfa.am/u_files/file/invest/project.pdf. (29 Government Decree N 1030-L of 6 September 2018, https://www.arlis.am/DocumentView.aspx?DocID=125528.
- (30) Law on Licensing, https://www.arlis.am/DocumentView.aspx?DocID=150834.
- (31) Land Code, https://www.arlis.am/DocumentView.aspx?DocID=152345.
- (32) Commission decision N 88-N of 22 April 2015, https://psrc.am/contents/library.
- (33) Wind Enargy Resource Atlas of Armenia, 2003, National Renewable Energy Laboratory, USA.