Eligibility / Selection Criteria

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

Eligibility criteria for companies

Eligible companies are:

  1. privately owned, registered, and operating in Armenia,
  2. 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:

  1. for existing businesses: a proven track record and sound credit history, including financial reporting in compliance with local accounting standards,
  2. for 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,
  3. sound management and organizational structure,
  4. sound financial structure, including a sufficient security package for proposed borrowing.

Eligibility criteria for grid-connected PV projects

Eligible projects shall:

  1. have an installed capacity from 0.5 MWAC to 5 MWAC
  2. comply with applicable laws and regulations, including environmental and social issues
  3. be in private ownership and has a transparent ownership structure
  4. be based on a proven technology
  5. provide a debt/equity ratio not exceeding 80/20
  6. be either:
  • new,
  • under construction (not commissioned), or
  • built and operating (commissioned and connected to the national distribution grid) projects.

All projects must be designed in compliance with corresponding requirements of the Programme and national legislation, and in a way that the expected operational lifetime of the PV plants will be at least 20 years.

The projects shall also meet the following requirements:

  • ensure a minimum operational lifetime of 20 years for PV technologies,
  • comply with Minimum Technical Requirements for up to 5MW PV plants of the Programme,
  • 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 PV project, i.e. excluding other business activities,
  • generate revenues from electricity sales within the project that fully cover loan-relevant expenditures,
  • the Owners must disclose all project expenses 100% and document them transparently and auditable by third party.