The Armenian Government has approved the provision of an agreement with Anaklia Energy for the construction and operation of a 540MW gas power plant.
The approval follows a request for licence by Anaklia to construct a gas power station in Armenia.
The company will finance the power plant construction and coordinate with gas supply and availability of the necessary permits, tax, holidays, etc.
Powered by a General Electric-manufactured gas turbine, the power plant is expected to contribute to the energy capacity development of the nation.
Armenian Prime Minister Hovik Abrahamyan was quoted by Arka News Agency as saying that the government had predetermined during talks that the company will bear all the risks, and not the government.
"If the project proves to be successful, it will be very effective, since the generated power will be exported."
The project is expected to cost $600m. The power plant will be constructed in 18 months and feature two 270MW units.
The country does not have natural gas reserves and imports it from Russia through Russia-Georgia-Armenia pipeline.
Armenia's power requirements are largely met by the natural gas-fired thermal power plants in Yerevan (completed in 2010) and Hrazdan. Around 43% of electricity in the country is produced by the Metsamor Nuclear Power Plant.
The country also has an option of importing gas from Iran through the Iran-Armenia pipeline that was completed in 2008.
Armenia generated electricity worth $85.4m in the first half of 2014.
Image: Armenian cabinet has approved a 550MW plant in the country. Photo: © The Republican Party of Armenia.