By Atom Markarian
The World Bank indicated on Tuesday that it will likely unblock some of its frozen loans to Armenia, saying that the Armenian government has addressed its misgivings about the recent controversial privatization of national power grids.
Its resident representative in Yerevan, Rodger Robinson, said a World Bank mission that held talks with Armenian officials last week will ask the bank’s board of directors to disburse a $20 million Structural Adjustment Credit (SAC-4) next month.
“After the agreements that we have reached with the government, the level of uncertainty has definitely gone down a lot,” Robinson told a news conference.
The bank and other Western donors had criticized the government’s decision last August to sell a commanding 80.1 percent share in the Armenian Electricity Network (AEN) to a British offshore-registered company for $37 million. They argued that Midland Resources Holding lacks the expertise to end the network’s huge losses.
But Robinson said the World Bank is now more positive about the deal, jointly working with the government to help Midland Resources find a “reputable and experienced operator” for AEN. “We are reasonably confident that this privatization has a chance for success in improving the electricity distribution system in Armenia,” he said.
Sources told RFE/RL last week that Midland Resources may soon sign a management contract with the German engineering group Siemens.
The delayed SAC-4 tranche would cover more than a quarter of the Armenian government’s 2002 budget. The government also hoped to secure the first $20 million instalment of another World Bank loan this year. But Robinson said the SAC-5 tranche will not be made available earlier than next year. This means that the government will have to cut back on some of its planned expenditures.