Armenia Denies Gazprom Pressure Over Energy Privatization

YEREVAN (RFE/RL)–The Armenian authorities on Tuesday denied reports that Russia’s Gazprom monopoly is putting pressure on them to gain control of Armenia’s power grid. The ITERA corporation–a Gazprom subsidiary–is taking part in an international tender for a controlling stake in Armenia’s energy distributing enterprises in conjunction with another Russian firm–Rosatomenergo. Reports in the Armenian press have alleged that Gazprom–backed by the Russian government–has secured Yerevan’s consent and the outcome of bidding is predetermined.

But Armenian Energy Minister David Zadoyan dismissed the reports as baseless–saying that the tender will be handled in a "transparent" way. He pledged that the government will consult with the Armenian parliament and public before making a final decision expected in May. "That is why I want to arrange hearings on the issue in the National Assembly," Zadoyan told RFE/RL.

After two rounds of "pre-qualification" five foreign companies including ITERA have been shortlisted for the final phase of the contest. Among them are American–Swiss–Italian and Spanish companies. Top executives from the five firms on Tuesday attended a conference in Yerevan on development prospects of the Armenian energy sector.

Resource-poor Armenia experienced severe power shortages in the early 1990s–but due to sweeping structural reforms managed to phase out electricity rationing by 1996. Some of the country’s electricity surplus is currently exported to Georgia and Iran. Still–officials and analysts say that more than $1.5 billion will be needed in the next ten years for upgrading its aging equipment and making the sector profitable.

The World Bank–which has been pushing for the privatization of the energy distributing network–closely watches the process. Gazprom is Armenia’s main supplier of natural gas–which is primarily used for power generation.

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