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Donors Endorse New Government Plan On Power Grids


By Atom Markarian

The World Bank and other Western donors on Friday gave their backing to the Armenian government’s intention to find a foreign operator for Armenia’s troubled power companies after the repeated failure to privatize them.

“The donors see the program presented by the government as a credible, even though a second-best, way of achieving what was intended to be achieved through the privatization,” said Salman Zaheer, a senior World Bank adviser for energy issues.

Zaheer spoke to RFE/RL after a meeting earlier in the day between senior Armenian officials and the donors’ representatives. During the meeting Prime Minister Andranik Markarian officially announced Yerevan’s final decision to try to lease the country’s electricity distribution network to a foreign investor capable of turning it into an efficient business.

Zaheer said the World Bank, which is Armenia’s largest creditor, backs the idea and asked the government to draw up a timetable for preparations for another international bidding. The donors believe that the government should set up “a governance board for the power companies” that will oversee their future operator’s work, he added.

The bank’s position opens the way for the release of a $20 million budgetary loan that was pegged to the privatization of the four power grids. Its resident representative in Armenia, Owaise Saadat, was quoted by the government’s press office as telling Markarian that the sell-off failed because of “external factors.”

However, the loan is unlikely to be made available before next February and will most probably be included in the Armenian budget for next year. Zaheer and Saadat assured that the funds’ disbursement will not depend on the outcome of the new tender which is likely to take months.

Markarian’s cabinet on Thursday decided to merge state-run power utilities into a single enterprise as a first step towards their lease.
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