YEREVAN (ARKA)—Deputy energy minister Areg Galstyan discounted arguments that the debt-ridden national power distribution company, Electricity Networks of Armenia (ENA), should be nationalized, saying at a public debate on the future of the utility that it must be owned and run by a private investor.
On September 17, the Armenian government announced that Inter RAO, the owner of ENA, asked it to authorize the ENA’s sale to Liormand Holdings Ltd, a company registered in Cyprus.
Prime Minister Hovik Abrahamyan was said to have instructed several government ministries to look into the deal before government made a decision on the matter. The government is expected to discuss the matter at a meeting on September 25.
“A company of this level [ENA] should not be owned or run by the government. It must be operated by an effective private company,” Galstyan said.
Galstyan said several options had been considered about how to address the problem of the utility, including its nationalization. Studies, however, showed that the government was unable to run it as effectively as a private company.
He said that the government is detailing an agreement with the potential owner of the utility that includes a new set of mandatory requirements, tougher than previous ones. Galstyan added that the agreement provides for greater public control of the utility’s operations.
Armenian media reports said earlier that Liormand Holdings Limited is owned by Russian-Armenian billionaire Samvel Karapetyan. According to some reports, Karapetyan will buy 50% of the shares of the facility, while the other 50% will be distributed among three wealthy Armenian businessmen—Gagik Tsarukyan, former head of the Prosperous Armenia Party, Karen Karapetyan, former head of ArmRosgazprom gas distribution company (now Gazprom Armenia) and a former member of the National Assembly of Armenia, Harutyun Pambukchyan.
The decision to sell ENA comes less than three months after Armenia’s Public Services Regulatory Commission (PSRC) allowed the company to raise electricity prices by almost 17 percent. The decision sparked two-week nonstop demonstrations in Yerevan, forcing the government to subsidize power supplies in Armenia until the end of a government-commissioned audit of the utility, meant to determine whether the ENA has been mismanaged by Inter RAO.