The government plans to liberalize Armenia’s energy sector in hopes of attracting large-scale investments from U.S. and other foreign companies, a senior official in Yerevan said on Wednesday.
“The government has initiated a process of energy market liberalization,” Deputy Minister of Energy Infrastructures Hayk Harutiunian told RFE/RL’s Armenian service (Azatutyun.am). “We have already presented a plan of actions which will ensure that the energy sector switches to a new, liberal model by 2021.”
The U.S. ambassador to Armenia, Richard Mills, stated last month that U.S. energy firms could invest as much as $8 billion in the sector if the authorities in Yerevan open it up to competition and remove all obstacles to electricity exports to neighboring Georgia and Iran.
Harutiunian dismissed suggestions that Mills made a case for reducing Armenia’s heavy dependence on Russia for energy. “I believe that the ambassador definitely meant the process of energy market liberalization which we have initiated. The energy market is completely regulated and there is no free competition there right now.”
“The $8 billion figure was an estimate made by our ministry mainly about the commercially viable potential in the area of solar energy,” argued the official. “That potential can certainly be realized. But it will be realized in a phased manner and that will greatly depend on international prices.”
“There are regular meetings with the U.S. ambassador and American companies on finding formats for expanding American companies’ activities in Armenia’s energy sector,” he added.
Harutiunian noted that one U.S. company, ContourGlobal, already privatized Armenia’s largest hydroelectric complex two years ago in a $250 million deal strongly backed by the U.S. government. Also, he said, an Italian company started building a thermal power plant in Yerevan in March.
Russian natural gas and nuclear fuel generate at least 60 percent of Armenia’s electricity. In addition, Russia’s Gazprom monopoly owns the country’s gas distribution network. Another Kremlin-controlled energy giant, Inter RAO, owned the Armenian national electric utility until selling it to an Armenian-born billionaire in 2015.
And just last month, the RusHydro group also controlled by the Russian government reaffirmed its intention to sell off Armenia’s second most important hydroelectric complex belonging to it.
The European Union is also supporting greater use of renewable energy in Armenia. As part of that effort, the EU Delegation in Yerevan installed two solar-powered bus stops in Yerevan earlier this month. The delegation chief, Piotr Switalski, said the EU is thereby “contributing to Armenia’s energy independence.”
Harutiunian insisted that Switalski did not seek to convey any geopolitical messages to the Armenian government. “The development of renewable energy must not be viewed only through the prism of energy security,” he said. “It should also be viewed in terms of cutting prices and measures taken against climate change. So I don’t think it is appropriate to politicize such statements.”
The official added that more than 100 small solar power plants are already operating in Armenia.