EBRD to Purchase Shares of Armenia’s Electricity Distributing Companies

YEREVAN (Noyan Tapan)–On December 5–the Armenian government and the European Bank for Reconstruction and Development (EBRD) signed an agreement on the direct sale of 20% of shares of Armenia’s electricity distributing companies. Under the agreement–up to 19.9% of the shares of each of the companies are to be sold to the EBRD.

The selling price of the shares will be determined after 51% of the shares are sold to strategic investors (before March 1 2001).

The shares of the companies are included in two blocks. In the first block are the shares of the "Yerevan Electricity Network" CUJSC–and "Northern Electricity Network" CJSC. The second block will contain the shares of the "Southern Electricity Network" CJSC and "Central Electricity Network" CJSC. Each participant in the tender may purchase only one block of shares. According to the law–at least 51% of the shares included in each block are to be equally sold to the winner of international tender. 20% may equally be sold to any international financial company. The EBRD has been selected as such a company.

Minister of Energy Karen Galustian said the signing of the agreement was preceded by serious work and discussions on all details of privatization. Considered were EBRD-Armenian government relations–EBRD-strategic partner relations–etc..

Minister of Justice David Harutiunian is confident this deal will reduce risk and allow further privatization and attract more strategic investors. Thus–the presence of a financial investor such as the EBRD will oblige the strategic investor to ensure the transparency of its actions.

EBRD Representative to Armenia Hildegard Gashek stated the EBRD’s goal is supporting Armenia during its transitional period–and will assist Armenia’s energy-generating enterprises in getting investmen’s.

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