Eligibility / Selection Criteria

To qualify for a GAF-RE loan, the private entrepreneurs and projects have to meet certain institutional, financial, and technical eligibility criteria.

Eligibility criteria for companies

Eligible companies are:

  • privately owned, registered, and operating in Armenia
  • operating in compliance with national environmental, health, and safety legislation.

Furthermore, PEs applying for financing under the facility must meet the following general eligibility criteria:

  • for existing businesses: a proven track record and sound credit history, including financial reporting in compliance with local accounting standards.
  • start-up energy projects:
    These will be judged on the basis of the customary technical and market due diligence as well as satisfactory financial projections.
  • sound management and organizational structure
    sound financial structure, including a sufficient security package for proposed borrowing.

Eligibility criteria for projects

Eligible projects shall:

  • have an installed capacity below the threshold of 15 MW
  • The project must comply with applicable laws and regulations, including environmental and social issues.
  • be in private ownership

The ownership structure and ressource usage rights have to be clarified.

  • be based on proven technology
  • provide a debt/equity ratio not exceeding 70/30
  • be expansion or rehabilitation projects:

These must be designed in a way that the expected operational lifetime of the plants will be extended by at least further 15 years. Moreover, in the case of existing plants, the measures shall also aim at an increase of annual power generation over and above the present status.

  • ensure a minimum operational lifetime of 30 years for new SHPP projects and 20 years for other technologies
  • have stable incomes from other sources to service interest payments during the grace period of a GAF-RE loan
  • remain financially robust throughout the period of the loan with an adequate liquidity ratio – both current and quick liquidity ratios above unity – and be financially viable
  • ensure solvency on the basis of the generated electricity (excluding other incomes) and for servicing of the loan (principal and interest), i.e. the debt service coverage ratio (DSCR) should be above 1.0 during the entire period of the loan under a range of sensitivity analysis scenarios
  • always have a positive profitability ratio with preference given to borrowers with higher returns on assets and on equity (ROA and ROE) within the scope of the SHPP project, i.e. excluding other business activities
  • generate revenues from electricity sales within the project that fully cover loan-relevant expenditures, to set a repayment timetable with a maximum interest rate of 10.5% for the maturity period of the GAF-RE loan (until December 2024) including a possible grace period of not more than 2 years.
  • The Owners expenses must be documented 100%.