By Emil DanielyanA company controlled by South Korea’s Daewoo Engineering giant has been selected to run Armenia’s struggling power distribution network, it emerged on Friday.
Sources told RFE/RL that the Daewoo affiliate will soon sign a long-term management contract with the British-registered Midland Resources Holding, which recently took over the Armenian Electricity Network (AEN) following a $40 million deal with the Yerevan government. Details of the arrangement were not immediately available.
The sources familiar with the Armenian energy sector said Midland Resources considered a similar deal with the German engineering group Siemens, but that the latter withdrew from the selection process at the last minute, effectively giving the contract to the Koreans. The sources said the World Bank, Armenia’s largest Western donor, will likely approve the choice of the new power grid operator.
A top Midland Resources executive, Andrey Zavrazhnov, claimed earlier this week that the bank, which was initially skeptical about the offshore-registered company’s ability to revamp the loss-making AEN, has already approved the move.
The World Bank’s chief representative in Yerevan, Roger Robinson, said earlier this month that the Armenian government has addressed its misgivings regarding the energy sector privatization and will likely obtain a $20 million loan soon.