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PM Looks Forward To Sale Of Armenian Power Grids


Armenia - Entrance to the head offices of Electric Networks of Armenia, Yerevan, 18Aug2015

Armenia - Entrance to the head offices of Electric Networks of Armenia, Yerevan, 18Aug2015

Prime Minister Hovik Abrahamian has expressed confidence that a Russian-Armenian billionaire set to buy Armenia’s electricity distribution network will manage to quickly end its huge losses weighing heavily on the national energy sector.

“I am sure that the losses will be reduced to a minimum and financial irregularities alleged by you will be eliminated,” Abrahamian told reporters late on Wednesday.

Due to those losses mainly incurred since 2010, the Electric Networks of Armenia (ENA) national power utility owes over $220 million to Armenian power plants and commercial banks. Electricity price rises repeatedly sanctioned by state regulators in the last few years have not been enough to sort out the ENA’s financial troubles. Many in Armenia believe that they primarily result from mismanagement and corruption among many ENA executives.

Abrahamian said that he personally asked the Armenian-born tycoon Samvel Karapetian to acquire the troubled power grids from their current owner, the state-controlled Russian energy group Inter RAO.

Inter RAO and Russia’s Tashir Group owned by Karapetian finalized a takeover agreement late last month. Armenia’s Public Services Regulatory Commission (PSRC) approved the deal last week. It is still now clear how much a Cyprus-registered firm reputedly controlled by Karapetian will pay for the ENA.

Abrahamian emphasized the fact that Karapetian has also agreed to subsidize power supplies to Armenian households jointly with the Armenian government at least until August 2016. He estimated that the year-long subsidy will cost the two sides around 8 billion drams ($17 million).

The vast majority of individual consumers will thus remain unaffected by a more than 17 percent surge in electricity prices approved by the PSRC in June. The move triggered nonstop street protests in Yerevan. They ended only after the government decided to bear the burden of the price hike, effective from August 1.

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