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Government Scrambles To Repay More Russian Debts


By Atom Markarian

The Armenian government is giving up more of its assets to settle almost $47 million in outstanding debts to Russian suppliers of natural gas and nuclear fuel, its main sources of energy. Prime Minister Andranik Markarian's cabinet has decided to hand over Armenia's largest cement factory to the ITERA gas exporter and divert half of its expected proceeds from electricity exports to the RosEnergoAtom nuclear operator.

The deal with RosEnergoAtom aims to pay for past and fresh supplies of Russian fuel to the Metsamor nuclear power plant. The Armenian Energy Ministry has run up $32 million in nuclear debts over the past six years. It also needs $6.7 million to pay for Metsamor's partial refueling which is due to start early next month.

Under an arrangement approved by ministers on Thursday, RosEnergoAtom will receive half of $77.4 million, which the Armenian government anticipates to raise from exports of electricity (most probably to Iran) in the coming years. Yerevan will, in the meantime, mortgage several hydroelectric power plants to the Russians as financial guarantee of the deal.

In a related move, the government made an unpublicized decision last week to transfer the cement factory in the southern town of Ararat to ITERA in payment for its final $10 million debt for past gas deliveries. The government was supposed to repay it with various industrial goods, but has failed to do so.

Informed sources said ITERA will in turn sell the state-run factory, the biggest in its kind in the entire South Caucasus, to an obscure offshore-registered firm called Roberto.

The plant was last year nearly purchased by Switzerland's famous Holsim Group. But the company cancelled the $22 million deal at the last minute, citing a global economic downturn that followed the September 11 terrorist attacks on the United States.

The Ararat factory is managed by Aram Sarkisian, a former prime minister and a leader of the opposition Hanrapetutyun party. Sarkisian, who was always opposed to its privatization, could not be reached for comment on Friday.

The two latest deals follow the finalizing last July of a Russian-Armenian agreement clearing a separate $98 million state debt to the Russian government. Armenia will repay it with controlling stakes in its biggest thermal power plant, an electronics factory and two research institutes in Yerevan. It is expected to be finally signed by the two governments next Monday.
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