Armenia to Sell Largest Power Generating Facility

The Vorotan power-generating plant

YEREVAN (RFE/RL)—A U.S. energy company announced on Wednesday that it is close to buying three big hydroelectric stations generating a considerable part of Armenia’s electricity.

The New York-based ContourGlobal said it is engaged in “advanced negotiations” with the Armenian government over the takeover of the plants built along the fast-flowing Vorotan river in the southeastern Syunik province.

“While commercial terms are still being finalized the purchase price will be very significant and all of the funds will be sourced from outside of Armenia using a combination of ContourGlobal’s own resources and those of prestigious international financial institutions,” it said in a statement. They include the U.S. Overseas Private Investment Corporation (OPIC) and the International Finance Corporation, a World Bank Group division, according to the statement.

“In addition to the full purchase price, ContourGlobal will be committing to invest further in a major overhaul of the main generating equipment at the power plants,” added the company. “This investment is urgently needed given the age of the plants and the under investment in recent years.”

Constructed in the 1970s and 1980s, the Vorotan Complex cascade is the largest power-generating facility still owned by the Armenian state. With an operational capacity of over 400 megawatts, it is nearly as powerful as the Metsamor nuclear plant that accounts for roughly 40 percent of Armenian electricity production.

The Soviet-era hydroelectric plants were supposed to be refurbished with 51 million euros ($66 million) in loans that were provided by a German development bank to Armenia in 2010. Officials said at the time that the modernization will be complete by 2015.

The Armenian Ministry of Energy declined to comment on their possible takeover by ContourGlobal. The Vorotan Complex management also declined a comment when contacted by RFE/RL’s Armenian service (Azatutyun.am).

Energy Minister Armen Movsisian did not deny the plants’ impending privatization when he was confronted by opposition lawmakers in the Armenian parliament on Wednesday.

ContourGlobal operates 33 power plants in 17 countries around the world. Its operational revenues exceeded $1 billion in 2011.

In recent weeks the Vorotan cascade has been at the center of media speculation resulting from ongoing Russian-Armenian negotiations over the price of Russian natural delivered to Armenia. There have been suggestions that Yerevan is ready to grant Russia’s Gazprom giant control over the facility in return for a 30 percent price discount. Energy Minister Movsisian has dismissed this speculation.

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14 Comments

  1. vartan said:

    HERE WE GO AGAIN ANOTHER GREAT IDEA BY ARMENIAN REPUBLICAN PARTY MEMBERS. IN ARMENIA EVERETHING IN FOR SALE.HOW INEPT AND CURROPT IS THE RECENT GOVRNMENT OF ARMENIA. THEY CAN NOT MANAGE POWER PLANT RAILWAY , GAS COMPANY BEVRAGE COMPANY. HOW ARE WE AS A NATION TEN MILLION BIG MOUTH. “LOPAZ” WHO.IS INDIFFRENT ABOUT ARMENIA OR ANYTHING GOING ON OVER THERE. ARMENA NEEDS NEW THINKING . NEW LEADERS . NEW EDUCATIONAL SYSTEM TO CHANGE COUNTRY FROM THIS UNBEARABLE MISSARY AND BRAINWASHED, SOVIET ERA THINKIRS AND MICKYMOUSE LEADERS

  2. Tarpininan said:

    Do the Armenians lost their brain totally, why do they need to privatize the electrical plant? who is really governing Armenia? They are selling the country here!

  3. AraK said:

    Armenia is losing another part of her infra structure/energy source to “odars”, but I’m sure that an oligarch crook will have a hefty commission from this sale…

  4. Sis said:

    Why are they selling everything? Can’t they operate it? Where does money go? These people are selling our country before they go.At that time nothing will be left.

  5. Garo said:

    I hope those guys know what they are doing. We keep hearing about the sales of public properties.

  6. GB said:

    I wonder sometimes if Armenian oligarchs ever read and learnt from our sad and humiliated Armenian history. Today, unfortunately money starved and traitors oligarchs, running our beloved Armenia!!

  7. Arziv said:

    They will not sell. Something will happen at the last minute and reflection and sanity return.

  8. Tarpininan said:

    Armenia has taken a 66 million dollar loan from a German Bank to remodernize this electrical plant that was supposed to be modernized before 2014 this loan will be payed back by the citizens taxes in the future, and now one year before they should finish the remodernization works they sell it ! where that money of the loan goes? who took it? why they are selling now? to whom? this belong to the country no politician of any Armenian Government has the right to sell it, a Referendum is needed here about selling the country property. With this trend the copuntry will be deprived from all its resources and assets how the government will finance itself only through taxes? This kind of privatization leads the country to collapse worse than greece! We should stop them, where are the Constitutional Judges in Armenia? who will stop this robbery!?

  9. Minas said:

    There may be more to this deal than people realize, and while this might seem like a bad move at first glance, there may be some geopolitical interests on both sides that could be more valuable

  10. Arman said:

    Don’t be scared, it’s an immovable property. No one is going to steal it. The foreign company that will buy this plant will be a better manager than the Armenian Government. ContourGlobal operates many power facilities around the globe. They are better engineering and managerial professionals than the obese oligarchs that own Armenia’s assets and infrastructure. I believe this sale is good for Armenia IF the government uses the proceeds carefully. I think this plant is being sold so the large sum of money goes to the new nuclear power plant that will replace the existing Metsamor reactor. In that case, I support this move. Nuclear power is very strategic for Armenia. Turkey and Azerbaijan FEAR a nuclear Armenia.

  11. Garo said:

    they have to sell because they need the money to buy houses and villas in Spain and Switzerland and drive 4WD imported from Dubai

  12. Rifat said:

    Corrupt oligarchs are also a problem in Turkey via the corrupt AKP party. Neighboring nations should work together to build democracy, civil society and get rid of oligarchies.

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