By Shakeh Avoyan
The Armenian and Russian governments completed the implementation of their 2002 equities-for-dent agreement on Friday with the formal transfer of Armenia’s largest thermal power plant under Russian ownership.
A relevant agreement was signed in Yerevan by visiting Russian Deputy Prime Minister Boris Alyoshin and the Armenian ministers of energy and industry. A separate joint memorandum sets out development priorities for the Hrazdan plant and four other largely moribund enterprises handed over to Moscow in payment of Armenia’s $100 million state debt.
Alyoshin said that all of them have a “development potential” and will be revived with Russian investments in the coming years. He also indicated that most of them will eventually be privatized by Russian firms.
“For the Russian government holding them under state ownership is not an end in itself,” Alyoshin told a news conference held at the end of his two-day visit to Armenia. He added that a change of ownership will be discussed after an unspecified “adaptation period.”
The Hrazdan plant, located 40 kilometers north of Yerevan, will be managed by RAO Unified Energy Systems (UES), Russia’s state-run power utility that has been aggressively expanding into parts of the former Soviet Union, including neighboring Georgia. Last year UES took over financial management of the nuclear plant at Metsamor and became the owner of five hydro-electric stations as a result of another Russian-Armenian swap arrangement.
The power generating facilities account for about 90 percent of Armenia’s annual electricity production, giving the Russians virtually full control of the Armenian energy sector.
Meeting with Alyoshin earlier in the day, President Robert Kocharian welcomed the successful implementation of the debt agreements that have been condemned by his domestic opponents for making Armenia even more dependent on its Soviet-era master. Kocharian’s office said the two men are satisfied with “high level of mutually beneficial cooperation in various areas between the two countries.”
The Armenian side also sought Moscow’s support for putting into practice its long-standing plans to build a natural gas pipeline from neighboring Iran. Armenia currently imports the fuel solely from Russia through a pipeline that runs through Azerbaijani-populated areas of Georgia and was frequently disabled in the past.
The Russian suppliers also hold a majority stake in a company that runs Armenia’s domestic gas infrastructure. Their cooperation is therefore vital for the construction of the Iran-Armenia pipeline. It remains to be seen whether they are interested in the diversification of Yerevan’s supply sources.
Alyoshin was vague about the subject, saying that it will be discussed in greater detail by the Russian-Armenian intergovernmental commission on economic cooperation soon.
“Our presidents have discussed this issue. We have to solve this problem technically,” he said. “Russia is definitely interested [in the project], both commercially and in terms of becoming a gas supply operator in the future.”