Solution description
Armenia is vulnerable to climate change impacts, ranked 50th in the 2022 ND-GAIN Index. Significant changes in Armenia’s climate are to be expected: temperatures will likely rise by 4°C by 2070, leading to increased soil water deficit by 25-30%; reduced productivity of irrigated land by 24%; degraded lands and pastures. These climatic changes will impact the economy and specifically the agricultural sector affecting businesses, jobs, and household income, resulting in food shortages and increased food prices, hence worsened food security, as found in Consolidated Livelihood Exercise for Analysing Resilience (CLEAR) conducted by WFP in 2023. In 2023, the country’s average poverty rate was 23.7%. In March 2024, food insecurity levels in Armenia stood at 20%, while an additional 54% of the population were categorized as marginally food secure, hence at risk of falling into food insecurity in the event of a shock. Food security is threatened by high post-harvest losses, limited market access, and the vulnerability of small farmers. These challenges are particularly severe for women, who often have less access to resources, training, and market opportunities compared to men.
The proposed solution will target the renewable energy subsector, facilitating the installation of a solar station in a community-owned building and connecting it to the grid. The generated solar electricity will cover the energy needs of municipal buildings, kindergartens and public infrastructure reducing operational costs. Surplus electricity generated during sunnier months will be sold to the grid, with annual grid payments and budgets of utilities saved contributing to community revolving funds. These funds will be reinvested into climate-sensitive agricultural projects during the coming five years and increasing the number of beneficiaries over time. To ensure financial sustainability and scalability, the project will advocate with the government to establish institutional mechanisms and policies that promote community-based energy solutions, enhance the sustainability of revolving funds and attract further investments into renewable energy and climate-smart agriculture. Over 25 years, the solar station will generate electricity worth USD 168,750 (25 * 40kWt * 1,500 annual solar energy flow * AMD 45 per kWh saved/sold). The initial investment of USD 34,033 will generate USD 156,850 in savings and revenues, which will be reinvested into sustainable agricultural projects reinforcing long-term food security and economic resilience.
This solution will support the South-South Triangular Cooperation through scaling up the successfully tested model of community revolving funds, collaborating and sharing knowledge, skills as well as know-how and best practices with other Governments, partners, civil society and private sector organizations.
The expected impact of the proposed intervention is to have enhanced food security in the target community through renewable energy source and raised awareness on green energy and healthy nutrition. This impact will be measured by community savings, reallocation of those into sustainable agricultural projects and knowledge increase among participants of educational sessions.
Innovation alignment
This proposed project presents an innovative community-driven approach to renewable energy and climate resilience. Unlike conventional solar projects that focus solely on energy generation, this concept integrates sustainable financing, policy advocacy and agricultural resilience.
Its key novel features include:
- Dual-purpose solar installation: The project not only powers municipal buildings, kindergartens, and public infrastructure but also feeds surplus energy into the grid, creating an additional revenue stream for the community.
- Community revolving funds: Grid payments from surplus electricity sold and utility budget savings contribute to a financial pool that is reinvested in climate-sensitive agricultural initiatives, ensuring long-term benefits for the community.
- Community ownership: One of the community selection criteria is the readiness to co-finance the costs of installation of solar station and connection to the grid. Community co-financing ensures ownership and long-term commitment of the local administration.
- Scalable and replicable model: The project’s long-term financial stability is strengthened through policy advocacy, institutional frameworks and government support for community-driven energy initiatives.
- High return on investment (ROI): With an initial investment of USD 34,033, the project will generate USD 156,850 in savings and revenues over 25 years, significantly impacting local economic opportunities.
The project directly contributes to multiple SDGs:
- SDG 7 (Affordable and Clean Energy) – Increases renewable energy capacity and provides affordable electricity to community infrastructures.
- SDG 13 (Climate Action) – Reduces GHG emissions by replacing fossil fuel-based electricity with clean solar energy.
- SDG 2 (Zero Hunger) – Reinvests solar energy revenues into climate-resilient agriculture supporting food security.
WFP Armenia can share the best practices and lessons learned from the community revolving funds with other contexts utilizing the platforms and centers of expertise of UNOSSC and other respective partners.
Solution impact
The project will target the renewable energy subsector, facilitating the installation of solar station in a community-owned building and connecting it to the grid. A 40kWt solar station will reduce 19.26 tons of carbon emissions per annum, totaling 481.5 tCO2e (25 * 19.26) over the 25-year lifespan of the solar system. The generated solar electricity will cover the energy needs of municipal buildings, kindergartens and public infrastructure reducing operational costs. Surplus solar energy will be fed into the grid, with payments supporting community agriculture projects and expanding benefits over time.
The initial investment of USD 34,033 will help the community to overcome the lack of financial resources and become self-sufficient for 25 years (solar station lifespan). Investments in solar station as a platform for revolving funds will make the community independent from other energy sources. The 40kWt solar station will encourage long-term behavioral changes in the community, raising awareness of energy efficiency, environmental responsibility and financial independence. Through community meetings, residents will learn about the benefits of renewable energy, adopt energy-saving habits, support sustainability and integrate renewable energy in their homes. In line with green energy initiatives WFP will lead comprehensive sessions on healthy nutrition and healthy lifestyles for children and caregivers. These sessions will emphasize the importance of balanced diets, the benefits of nutritious food and the impact of food choices on long-term well-being. Through interactive discussions both children and caregivers will gain practical knowledge on meal planning, nutrient-rich diets, and strategies to prevent malnutrition. These sessions will promote healthier eating habits while also improving the community’s resilience and food security.
The return on investment for the community is (25*6,274–34,033)/34,033*100=361%. The payback period is 34,033/6,274= 5.4 years.
Replicability / scalability
The proposed model is based on a strong mitigation potential and financial sustainability. It ensures that GHG emission reductions are translated into community benefits for long term climate resilience and sustainable economic growth. The selection is based on Armenia’s Renewable Energy priorities and existing metering regulations allowing the communities to sell surplus electricity to the grid or reallocating between budget lines.
The project will drive wider adoption of solar energy as cost savings benefit community projects. WFP tested a model where communities decided to reinvest savings into solar stations after experiencing their benefits. Designed for replication and scalability the project can extend its impact beyond two communities. By demonstrating financial and social benefits it will build a viable example supporting wider adoption. The model can be implemented in countries with similar legislation wherein community budgets can be reallocated from utility lines to community agricultural projects and surplus electricity sold to the grid. Even if such legislation is not existent in other countries, this concept can be used for best practice and advocacy purposes.
The proposed model has been tested in Lusakert community of Armenia with the financial support of South-South and Triangular cooperation. In 2022, WFP established of a 20 kWt solar station. Based on the decision by local government, annual electricity cost savings (EUR 3,595) were redirected to the reconstruction of a 500m irrigation line which covers a 20-ha area of the community. Fifty households (210 people) directly benefit from this endeavor for enhanced agricultural capacities. Also, 15 smallholder farmers received seeds and training on agricultural techniques to increase productivity and profitability. The impact of this investment approach was felt beyond the smallholder farmers at the community level as increased quality, safe, and locally produced food became available on the market at affordable prices.
Having tested this model successfully in one community, WFP proposes to support replicating and scaling this model in one more community: Zuygaghbyur community of Shirak region. Shirak is a northern region with the highest food insecurity rate in the country (27%). As of 2023, Shirak was the poorest region of the country with 43.1% poverty rate.
Cooperation potential
The proposed project contributes to the following thematic area: Enhancing agricultural productivity and climate resilience, including through South-South and Triangular cooperation. It supports and advances South-South and Triangular Cooperation by promoting knowledge sharing, technology transfer and collaborative policy development between regions facing similar climate, energy and food security challenges. The project’s community-based solar energy model can be shared with other developing countries through SSTC enabling replication. By demonstrating successful integration of renewable energy with climate-resilient agriculture the project serves as a scalable best practice for countries seeking energy-food security solutions. By reinvesting solar revenues into sustainable farming, this model enhances resilience against climate shocks for the countries that struggle with high energy costs and climate-related agricultural challenges. The project supports policy advocacy for decentralized energy solutions which can be adapted and promoted across South-South and Triangular Cooperation networks.
Territory coverage
The proposed project will be implemented in Zuygaghbyur community of Shirak region, the Republic of Armenia.
Collaborators
For the successful implementation of the proposed project, the following team will be involved:
- Arman Khojoyan, male, Deputy Minister of Economy,
- Aram Meymaryan, male, Deputy Minister of Environment,
- Nanna Skau, female, WFP Representative and Country Director, management of WFP operations, partnership with the government,
- Maria Muradyan, female, WFP Head of Programme, coordination of the project,
- Vahan Arakelyan, male, WFP Head of field offices, community sensitization, and meetings,
- Araksya Adamyan, female, WFP Head of Finance and Budgeting, financial reporting,
- Yessai Nikoyan, male, WFP Supply Chain Officer, operations management,
- Zaruhi Ohanjanyan, female, WFP Research, Assessment and Monitoring Officer, monitoring and lessons learned,
- Gohar Sargsyan, female, WFP Communications Officer, visibility,
- Artak Ordyan, male; Lusine Gyulbekyan, female WFP Partnership Team, proposals and reports.
