Կիրակի, դեկտեմբերի 21, 2014 Ժամանակը Երեւանում 23:23

in English

New Armenian Plant To Supply Energy To Georgia

Armenia - Energy Minister Yervand Zakharian and a representative of the Anaklia IEP Holding company sign a preliminary agreement on the construction of a power plant, Yerevan, 22Aug2014.
Armenia - Energy Minister Yervand Zakharian and a representative of the Anaklia IEP Holding company sign a preliminary agreement on the construction of a power plant, Yerevan, 22Aug2014.

A new and large thermal power plant to be built in Armenia by a little-known company will supply electricity to neighboring Georgia, Energy and Natural Resources Minister Yervand Zakharian said on Friday.

Zakharian made the announcement after finalizing a corresponding agreement with representatives of the company, Anaklia IEP Holding, on the second and final day of Georgian Prime Minister Irakli Gharibashvili’s visit to Yerevan.

The “basic provisions” of the deal were signed one week after being formally approved by the Armenian government. The latter said that IEP Anaklia will invest about $600 million in building the natural gas-fired plant at an unspecified location in Armenia. The facility will be equipped with turbines manufactured by the U.S. giant General Electric and have a design capacity of 540 megawatts, the government said.

A statement by the Armenian Ministry of Energy and Natural Resources said that in return Yerevan will give the obscure investor tax breaks, guarantee “supplies of sufficient volumes of gas” to the plant and facilitate the export of its electricity.

Speaking at the signing ceremony which very few media outlets were able to cover, Zakharian confirmed that Georgia will be the main recipient of that energy. “Work on the power plant will start soon. It will take 36 months,” the official Armenpress news agency quoted him as saying. No other details were reported.

It remained unclear who owns Anaklia IEP and why it decided to launch the large-scale energy project. An Armenian pro-opposition news service, ilur.am, claimed this week that the company is mostly owned by Georgian businesspeople but registered in the British Virgin Islands, a tax haven.

Anaklia is also the name a coastal town in western Georgia where the Georgian government plans to build a new Black Sea port with a liquefied natural gas terminal.

Anaklia IEP may well have been attracted by the relatively low cost of Russian gas delivered to Armenia via Georgia. The Armenian government secured the price discount after controversially deciding last year to seek membership in Russia’s Customs Union with Belarus and Kazakhstan.

The preliminary deal on the new power plant was signed the day after Zakharian met with Georgian Energy Minister Kakha Kaladze, who was among officials accompanying Gharibashvili on the trip. It was announced after Gharibashvili’s talks with Prime Minister Hovik Abrahamian on Thursday that the two governments will increase the capacity of a new Georgian-Armenian power transmission line currently under construction.

Zakharian and Kaladze reportedly reaffirmed these plans at their separate meeting on Thursday. According to Zakharian’s press office, the two neighboring states will be able to more than triple mutual electricity supplies after the new line goes on stream in 2018.

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