State Energy-Efficient Home Improvement Program: How to Save on Renovations and Cut Utility Bills

The global trend toward energy-efficient technologies in construction and home renovation is gaining momentum. According to the International Energy Agency (IEA), buildings account for over 35% of global energy consumption, nearly 60% of which goes toward heating and cooling. To reduce emissions and ease pressure on energy systems, many countries are implementing government programs that promote energy-efficient renovations.

Armenia is no exception. Its government-backed energy-efficiency renovation program helps apartment and private home owners switch to more sustainable and cost-saving solutions by offering favorable loans with partial or full interest rate compensation.

Let’s explore who can benefit from this program, how it works, and what advantages it offers.

What Is an Energy-Efficient Improvement?

Energy-efficient renovation refers to home upgrades that reduce energy consumption and help lower utility costs. It’s more than just a cosmetic update — it involves improving structural elements and systems to retain heat in winter and cool air in summer.

Common upgrades include:

1. Insulating walls, roofs, and floors — helps retain indoor warmth
2. Replacing old windows with energy-efficient double glazing — reduces heat loss
3. Installing solar water heaters or solar panels — lowers hot water and electricity bills
4. Modernizing heating and ventilation systems — more efficient, uses less energy
5. Using smart home technologies — thermostats, automatic temperature regulators, heat-reflective panels

Why Does It Matter?

The less energy your home wastes, the less you pay — simple as that.

And thanks to the state program, you can carry out such renovations without heavy upfront costs and with interest subsidies to ease the financial burden.

What Is the Energy-Efficient Improvement Program?

This is a government initiative aimed at encouraging Armenian residents to carry out energy-efficient renovations. The program covers both apartments and private houses, offering preferential loans for insulation, installation of energy-saving systems, and adoption of eco-friendly technologies.

Key Features of the Program:

1. Interest rate subsidies: The government fully or partially covers the interest payments on the loan.
2. Loan purpose: Reduce energy consumption and make homes more environmentally friendly.
3. No down payment required.
4. Loan term: Up to 7 years.
5. Maximum loan amount:
6. Up to 7 million AMD for apartments
7. Up to 10 million AMD for private houses
8. Start date: April 15, 2022.
9. Extension: Renewed on October 10, 2024, with no specified end date.

This program makes it easier and more affordable to invest in long-term energy savings and home comfort.

Program Terms

Who Can Participate and What Types of Work Are Covered?

Participation Requirements:

1. You own an apartment or private residential house in Armenia
2. You plan to carry out renovations aimed at improving energy efficiency
3. You have a stable income and a good credit history

Examples of Eligible Renovation Work:

1. Insulating walls, roof, and floors
2. Installing new energy-efficient windows
3. Installing solar panels and water heaters
4. Upgrading to energy-efficient heating and ventilation systems
5. Installing smart thermostats and regulators

If you've been planning to replace old windows or insulate your walls — now is the time to do it on favorable terms.

What Are the Benefits for Homeowners?

This program offers several key advantages:

1. Lower monthly loan payments: Thanks to subsidies, interest overpayments can be minimal or even zero.
2. Reduced utility costs: After energy-efficient renovations, heating and cooling require less energy.
3. Increased property value: Homes with eco-friendly and energy-efficient upgrades are more attractive on the market.
4. Improved comfort: Homes become warmer in winter, cooler in summer, and quieter year-round.

Example:

After replacing windows and insulating walls, heating bills can drop by 25–35% annually.

A Step-by-Step Guide on How to Get a Preferential Loan Through the Program

1. Define the scope of renovation.

Decide which upgrades you want to implement: windows, insulation, heating systems, etc.

1. Contact a participating bank.

Check whether the bank takes part in the energy-efficient renovation program and what documents are required.The program includes 27 financial institutions — 13 banks and 14 credit organizations.

1. Clarify collateral requirements.

Since the loan is secured, you’ll need to pledge property as collateral.

1. Submit your loan application.

The bank will assess your income, collateral, and approve a loan amount within the program limits (up to 7 or 10 million AMD).

1. Sign the loan agreement and start renovation.

Once approved, funds are disbursed for carrying out the renovation works.

1. The government subsidizes the interest.

You repay only the principal — and possibly a small portion of the interest, depending on the specific subsidy terms.

Don’t forget to compare bank terms under government programs in our “Mortgage” section.

What Can Be Used as Collateral for an Energy-Efficient Renovation Loan?

1. Collateral must be residential real estate undergoing renovation or reconstruction.
2. Loan-to-collateral ratio is 100%, meaning the entire loan can be backed by the property's value.
3. The renovated property itself can serve as collateral.
4. If needed, banks may also request additional property to secure the loan.

List of Participating Banks

1. Converse Bank
2. Artsakh Bank
3. Ameriabank
4. IDBank
5. Armeconombank
6. Byblos Bank Armenia
7. Unibank

Example: How It Works

Let’s say you own an apartment in Yerevan and plan to replace windows and insulate walls. The renovation costs around 6.5 million AMD.

You take out a 7-year loan at 10% annual interest. Thanks to the government program:

1. The entire interest is subsidized and you pay 0% in overpayment.
2. Your monthly payment covers only the principal — about 77,000 AMD/month.
3. After renovation, your heating bills drop by 30%, saving an additional 15,000–20,000 AMD/month.

Bottom line: You benefit twice — on the renovation and on your monthly utility savings.

What If You Already Have a Mortgage?

Having an existing mortgage does not prevent you from participating in the Energy-Efficient Renovation Program. The key requirement is that the property is in your ownership and there are no restrictions on performing renovation works.

Possible Scenarios

You have a mortgage and want to renovate the mortgaged property

1. Check with your bank to confirm whether upgrades are allowed — usually, this is possible with the lender’s consent.
2. Since the renovation program does not require additional collateral, you may be able to take out a separate, government-subsidized consumer loan for the renovation.

You want to combine your mortgage and the renovation loan

1. Some banks allow combined financing — for instance, increasing your current mortgage amount or issuing an additional loan supported by the state.
2. This is especially helpful if you're planning a comprehensive home upgrade, not just replacing windows.

You already renovated and want to get compensation

1. Unfortunately, the program only applies to planned renovations.
2. There is no retroactive compensation for work that has already been completed.

Tip:

Contact your mortgage bank to check if you’re eligible for the program.

Even with an active home loan, you may still qualify for preferential financing to improve your property's energy efficiency.

Conclusion: Smart, Sustainable, Affordable

The Energy-Efficient Renovation Program is not just about cosmetic upgrades — it’s an investment in comfort, sustainability, and financial stability.

Thanks to government-subsidized loans, you can renovate your home without high interest costs, and start seeing results — both in comfort and utility savings — from the very first month.

With state support, it’s now possible to make your home warmer, more modern, and energy-efficient — with minimal overpayment on your loan.

Share this information with friends or family — someone may be planning a renovation but not know about this great opportunity.

Use AFM to:

1. Find a bank participating in the program
2. Get a personalized loan recommendation
3. Avoid unnecessary overpayments and paperwork hassle
4. Get acquainted with all government support programs

Don’t miss your chance — take advantage of the government program today!