By Shakeh AvoyanThe new Russian owner of Armenia’s national power distribution company officially committed itself on Tuesday to investing almost 27 billion drams ($74 million) in the aging network in the next three years.
The investment plan of the Electricity Networks of Armenia (ENA) was submitted to and promptly approved by the Public Services Regulatory Commission (PSRC) in accordance with a law regulating the work of utilities. The company, owned by Russia’s Unified Energy Systems (UES) utility, intends to purchase new equipment, expand the network’s capacity, and upgrade its safety.
The deputy chairman of the state regulatory body, Nikolay Grigorian, said the capital investments make electricity supplies to households and commercial users more reliable. “They submitted this investment program in order to meet the quality standards defined by us,” Grigorian told RFE/RL.
The Armenian electricity network underwent a radical restructuring during the early and mid-1990s that helped the country to emerge from a severe energy crisis. The Armenian government controversially sold it to a British-registered company, Midland Resources Holding, in 2002, citing the need to attract hundreds of millions of dollars in capital investments in the Soviet-era network.
Midland in turn decided to resell ENA to UES in September 2005. The state-run Russian giant completed the $73 million takeover a year later, boosting Russia’s already strong presence in the Armenian energy sector. Alexei Rapoport, the UES vice-chairman, said last September that his company will invest $20 million in ENA during the first year of its operations.
Grigorian said that the ENA management has not yet asked the PSRC to allow it to raise electricity prices. “They see no such need for the time being,” he said. “But of course after making those investments they will ask the commission to adjust the tariffs accordingly.”