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Government To Merge Unsold Power Grids


By Emil Danielyan

The Armenian government moved to merge Thursday four state-run power utilities into a single enterprise, starting preparations for the network’s possible lease to a foreign company.

The ministry of energy is to complete the restructuring in the first quarter of next year. The government said the measure is part of its efforts to overhaul the loss-making energy sector.

The move followed the recent failure of an international tender for the Armenian electricity distribution companies. It was declared failed on November 30 after no foreign investor submitted a bid for a 51 percent stake in the low volt power grids. The government is now expected to look for a foreign operator willing to manage the utilities and end their chronic mismanagement and losses.

Armenian government officials will discuss on Friday their plans with Western donors that have been pushing for sweeping reforms in the energy sector. The meeting will be attended by representatives from the World Bank, the International Monetary Fund and the European Bank for Reconstruction and Development.

The World Bank, which had made release of a $20 million loan to Armenia conditional on the energy sector privatization, is understood to support the lease option.
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