The Armenian government said on Wednesday that it is close to completing the sale of the country’s largest hydroelectric complex to a U.S. energy company, which was controversial delayed last year.
Under the takeover agreement signed in January 2014, the New York-based group ContourGlobal was to pay $180 million for three hydroelectric plants making up the Vorotan Hydro Cascade and invest another US$70m in their modernization. The takeover, strongly welcomed by the U.S. government, was supposed to be formally completed by mid-April.
However, Armenia’s new Prime Minister Hovik Abrahamian, who took over on April 13, put the brakes on the acquisition, saying that some of its provisions run counter to Armenian law and need to be renegotiated.
“All those questions raised by the government have been mostly accepted by the buyer, and the deal is now on track,” Energy and Natural Resources Minister Yervand Zakharian announced at a news conference. “We will most probably complete the deal within a month.”
The delay ordered by Abrahamian fuelled media speculation that Russia is pressing Armenia to sell Vorotan to a Russian energy company instead. Armenian officials denied such pressure.
Russia’s Gazprom and RAO Unified Energy Systems giants already control much of Armenia’s energy sector. They have acquired most of their Armenian assets through controversial swap arrangements.
The U.S. government has strongly backed ContourGlobal’s efforts to become the first Western company to invest in the sector. The U.S. ambassador in Yerevan, John Heffern, warned in July that a scrapping of the deal would send a “very unfortunate signal” to big Western investors and call into question Armenia’s ability to do business with them.