By Atom Markarian
Russia will take over financial management of Armenia’s Metsamor nuclear power station in exchange for clearing its $40 million debt to Russian suppliers of nuclear fuel, officials from the two countries announced on Wednesday.
The deal, which followed months of difficult negotiations, was agreed during a two-day meeting of the intergovernmental Russian-Armenian Commission on Economic Cooperation. It was signed by the commission’s two co-chairmen, Russian Industry Minister Ilya Klebanov and Armenian Defense Minister Serzh Sarkisian.
“I would now say that all financial matters have been resolved,” Klebanov told journalists at the official ceremony.
Under the terms of the deal finalized during President Robert Kocharian’s recent visit to Moscow, Russia’s Ministry of Atomic Energy and RAO Unified Energy Systems utility will repay $32 million in Metsamor’s outstanding debts to the Russian TVEL nuclear operator. They will also raise at least $8 million needed for fresh fuel deliveries.
The Russians are to recoup their expenditures with proceeds from the sale of Metsamor’s relatively cheap electricity to the Hayenergo national power grid and the low-voltage energy distribution network. They will not only control the plant’s cash flows, but also be able to collect substantial sums owed to it by consumers.
The deal came after the Armenian government’s failure to raise funds needed for buying fresh nuclear fuel and repaying Metsamor’s old debts. Faced with the possibility of serious power shortages, the government had to reactivate the plant’s sole nuclear reactor late last month without its planned partial refuelling. The remaining fuel allows the Soviet-era facility can generate electricity until next May.
Metsamor accounts for roughly 40 percent of Armenia’s annual energy production.
A similar equities-for-debt scheme has already been used in the repayment of Yerevan’s separate $100 million debt to Moscow, with five state-run Armenian enterprises placed under Russian control late last year. Sarkisian and Klebanov said the bilateral commission has formed an ad hoc “investment group” that will discuss ways of revitalizing those assets.
The most significant of them is the Hrazdan thermal power plant, the largest in Armenia.
According to Klebanov, the Russian-Armenian commission has succeeded in strengthening economic ties between the two allied states. Critics, however, say that the debt agreements will only deepen Armenia’s dependence on Russia for energy.
(Photolur photo: Klebanov, left, and Sarkisian sealing the deal.)