By Shakeh Avoyan and Emil Danielyan
Armeian officials confirmed on Saturday reports that Russia’s principal power utility will take over financial management of the Metsamor nuclear power station in exchange for settling its $40 million debt to Russian fuel suppliers. The agreement, finalized during President Robert Kocharian’s visit to Moscow, could deepen Armenia’s dependence on Russia for energy. The head of Armenia’s Hayenergo national power grid, Iosif Isayan, confirmed that the deal was cut during Kocharian’s meeting on Thursday with Russian Prime Minister Mikhail Kasyanov. “This is a normal and effective mechanism,” Isayan told RFE/RL from Moscow.
Under that arrangement, Russia’s RAO Unified Energy Systems (UES) giant will repay $32 million in Metsamor’s outstanding debts to the TVEL nuclear operator. It will also raise at least $8 million needed for fresh deliveries.
Metsamor, for its part, will pay UES with proceeds from its electricity sales to Hayenergo and the Armenian power distribution network. The Russians will gain control of the nuclear plant’s cash flows. They will be able to collect not only electricity fees but also substantial sums owed to Metsamor by its customers.
Furthermore, the Armenian government has agreed to mortgage some of its biggest hydro-electric power plants as a financial guanratee of the deal which is one of the main results of Kocharian’s pre-election trip to Russia. President Vladimir Putin stressed the importance of his country’s growing economic presence in Armenia following talks with Kocharian.
The deal followed three months of difficult negotiations between the two parties which has delayed Metsamor’s refueling and reactivation, originally slated for November. In an extraordinary move, the Armenian government announced last week that it will relaunch Metsamor’s reactor without the planned refueling by the end of theis month. The authorities now hope that Russian fuel will be shipped in late April.
The delay fuelled speculation in Armenia that the Kremlin is seeking to clich more concessions from Yerevan in return for ending the Metsamor deadlock and endorsing Kocharian for next month’s presidential elections. Putin on Friday effectively voiced his support for Kocharian’s reelection bid in comments widely publicized by the Russian state media.
Putin said the recent assets-for-debt agreement between the two governments gave a new impetus to bilateral economic cooperation. Among five state-owned Armenian enterprises handed over to Russia in payment of a separate $100 debt was Armenia’s largest thermal power plant. It too will be run by RAO UES.