The largest final energy consumer in Armenia is the residential sector (over 38 % in 2016). Thus, it’s among the top priorities of the country when it comes to climate change mitigation. The climate of the country contributes to this tendency with an extended period of heating. With improvement of the economic situation in the country the greenhouse gas emissions from residential sector increased six fold in 2016 (1170 GgCO2eq) compared to 2000. The energy efficiency is one of priority areas of national policy and was in the focus of UNDP programmes. In the past years various projects were implemented all across the country. Regional Post discussed the latest project aimed at scaling up investments in energy efficient building retrofits with the manager of the project, Vahram Jalalyan.

Text : Margarit Mirzoyan    Photo : UNDP

Vahram Jalalyan, Project Manager De-Risking and Scaling-up

Investment in Energy Efficient Building Retrofits UNDP-GCF Project


Energy efficiency in the residential sector has been at the spotlight of UNDP Armenia since 2010 with its first major project “Improving Energy Efficiency in Buildings.” The project was financed by the Global Environment Facility (GEF) aimed at showcasing the expertise in energy efficiency from the technical perspective. It also had legal, educational, awareness-raising components. In the six years of its operation, the project achieved a considerable number of advancements. The first energy efficient retrofit of multi-apartment building in the country was introduced in district of Avan, Yerevan. In the framework of cooperation of Swiss Development Agency with the government, a social house in city of Goris has been constructed in 2012. The UNDP project contributed with integration of energy efficiency measures in the design and construction stages, resulting in 60% energy savings. In “Cascade Hills” residential complex, the recommended inclusion of energy efficiency ensured 40% savings, as well as expansion of the living area in buildings by 900 m2 generating additional value of ~ USD 1.5 mln for the developer. The similar energy efficient measures were introduced during the construction of the residential buildings in Akhuryan community under state housing programme.

“When the project began, there were no laboratories in the country to test thermal insulation materials and we had to transfer all these materials to Russia for testing, which was a massive obstacle for the advancement of the field,” remembers Mr. Jalalyan, “Eventually, we decided to purchase specialized equipment and establish testing laboratories in Armenia.” One in the National University of Architecture and Construction for educational purposes and the other one in the specialized accredited private company.

One of the critical components of the project was the improvement of the legal framework. The building codes relating to the energy efficiency were developed/renewed and adopted by Government in 2013-2016, besides that several European standards were adapted.

Boiler house before and after retrofit


The project considers as key obstacle the weak management system for the multi-apartment residential buildings. By Prime Minister’s decree a working group was established with a task to develop a new law on multi-apartment building management. Currently, Armenia has two relevant laws but none of them is properly enforced. UNDP supported the process with engagement of international experts and organizing study tour for key stakeholders to Estonia, as a country close to Armenia by its scale and similar building stock. Estonia has a successful experience in energy efficiency retrofitting and management of multi-apartment buildings after the collapse of the USSR.

“Today, the management bodies of residential buildings don’t enjoy trust of the people, and for many subjective reasons the residents refuse to invest in the well-being of their building,” says Mr. Jalalyan, “People don’t feel ownership for the building, just like for the car: the roof, the basement with its rats, garbage and even the smell, as well the lifespan of the building.” In the ideal world to improve energy efficiency in the building, its management body in consultation with residents is deciding on investments in the building, for example, to thermally insulate the building and acquiring loans for that. Then, the same management body hires design/construction firm, which renews the building and the repayment of the loan is ensured from resulting savings. It’s a simple logic, which doesn’t work in Armenia as, previously, the management of the buildings was highly politicized, and their reputation went beyond them. Another reason for the ineffectiveness of building management bodies is the simple ”egg and hen” paradigm – residents are not paying building’s operation and maintenance fee to the management, which consequently, refuses to do execute their function.



In 2017, UNDP narrowed down its focus to investment scaling-up processes in the energy efficiency of the building retrofits, in the frame of the new six-year project “De-risking and Scaling-up Investment in Energy Efficient Building Retrofits” implemented by UNDP under the coordination of the Ministry of Environment of the Republic of Armenia. The project will lead to tangible energy savings and reduction of greenhouse gas emissions with its target on multi-apartment, single-family individual houses and public buildings. The project has four components. The first one is the MRV – Measuring, Reporting and Verification system creation, which will enable the monitoring of the energy flows in the buildings and organize the monetization of the savings achieved, making the process measurable, transparent and affordable. The first component also involves awareness-raising activities. The second and third components are dealing with the policy de-risking and financial de-risking, correspondingly covering the lack of an appropriate legal background and financial mechanism and identifying the obstacles preventing these schemes from working. The fourth component refers to the Financial Incentives, with its primary focus on targeted subsidies to ensure that the most vulnerable households can afford energy efficiency retrofits.

Energy efficient retrofitted residential building in Avan administrative district of Yerevan, next to similar non-retrofitted one. Same view with thermal imaging camera


The project had received a USD 20-million grant from the Green Climate Fund. In addition to that there’s also an amount of combined co-financing from Yerevan Municipality (around USD 8 mln), the government of Armenia (USD 400,000), UNDP (USD 420,000) and parallel financing from International Financial Institutions. Roughly, USD 6 million from the grant funding covers the first three components of the project, and the remaining USD 14 million is allocated within the fourth component only, i.e., the targeted subsidies. The funding can cover in average 20-40 percent of the amount needed for the energy efficient retrofit of residential buildings, up to 20 percent for public buildings and 10 percent for private houses.

View of the dance hall in Erebuni youth and creativity center before and after energy efficient retrofitting



In cooperation with the Municipality of Yerevan, the project is providing the technical support for improving energy efficiency of about 50 kindergartens, Erebuni youth and children’s creativity center, also to “Muratsan” hospital, Agricultural Academy and others. Currently, the project partners with around ten design companies working on several projects. All these processes are overlooked by the relevant expert team, with all the highly-professional specialists, including construction architects and engineers, heating and air conditioning specialists, renewable energy specialists, energy auditors, which is, by the way, a new term in Armenia.

Overall around 150 kindergartens will be involved in the project, from which around 50 will go for deep renovation and the other ~100 will be subject for introduction of so-called “horizontal measures,” in other words not invasive. In 2018, the Yerevan municipality received a loan of EUR 7 mln from European Investment Bank for public buildings’ restoration accompanied with a grant of EUR 5 mln from E5P for the horizontal measures. The municipality also committed to invest from its own budget and UNDP decided to join and provide technical assistance of around EUR 1 mln.

View of the lobby of the Erebuni youth and creativity center before and after retrofit


As a continuation of the previous project, UNDP cooperated with the RA Urban Development Committee on improving legal framework, namely the development of multi-apartment building operation and maintenance rules. The other initiative is the creation of the building passport form. Both initiatives are finalized and submitted to UDC. “This practice was common in Soviet times; however, in today’s Armenia it became tough to receive accurate information about a specific building as there’s no centralized database or document pack,” indicated Mr. Jalalyan. To create this document, the experts should come, evaluate the technical state of the building to compile its capital and current renovation history. The passport should include the necessary information about the building, its management body, and residents, etc. Eventually, the passport becomes one complete document for which the next step will be the creation of buildings’ digital database.

Additionally, an operation manual is developed for work with the public buildings, and currently, they are working on another scheme for the residential buildings, which is a much harder part of the project. It’s easier to work with public buildings where there’s only one beneficiary, consequently, one decision-maker. “The residential buildings have a number of shortcomings, namely the issue of building management body and collective decision-making, implies Mr. Jalalyan, “In Europe, it’s possible for the residents to have soft loans for their building, benefit from EU accession funds but in Armenia, we don’t have it.”

Besides all the above-mentioned goals and targets, one of the most important parts of the project is to make it self-sustaining in the future. In the upcoming years, the practices developed during the project can become a part of the governmental protocol and serve as a guideline for scaling up the building energy efficient retrofits.

View of the gymnastics hall before and after energy efficiency retrofit in Erebuni youth and creativity center

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