Russian Giant Pushes for Single Caucasus Energy Network

YEREVAN (RFE/RL)–The chairman of Russia’s state-run Unified Energy Systems (UES) utility that controls 80 percent of Armenia’s power generating facilities–revealed Wednesday plans to restore a single energy network in the South Caucasus before the resolution of regional ethnic conflicts.

Anatoly Chubais claimed during a visit to Yerevan that exports of Armenian electricity to neighboring Azerbaijan and Turkey are possible without a quick settlement of the Karabagh conflict. "Just because there are political problems one can decide to freeze everything and wait until they are resolved. But one can also do the opposite," he told journalists after talks with Prime Minister Andranik Markarian. "We support the latter option."

Markarian echoed the commen’s–reiterating that Armenia and Azerbaijan could resume economic cooperation before a Karabagh settlement. Azerbaijan–however–has repeatedly ruled that out.

Nevertheless–Chubais sounded optimistic about UES’s ability to break the ice now that it is aggressively expanding across the former Soviet Union. He announced that UES will soon lease and repair Armenia’s idle high-voltage transmission lines leading to Azerbaijan and Turkey. UES–he continued–also has "serious plans" to soon partake in bidding for low-voltage power grids in Turkey.

Success of the UES takeover bid will pave the way for exports of Armenia’s power surplus to Turkey–Chubais added.

That has not been possible so far due to Ankara’s decision in 1993 to close the Turkish-Armenian border out of solidarity with Azerbaijan. Chubais’s deputy–Andrei Rapoport–indicated in Yerevan last month that UES may deliver Armenian electricity to Turkey via Georgia where the Russian company gained a foothold this summer with an unexpected purchase of the power distribution network in the capital Tbilisi.

Chubais–who met with President Robert Kocharian and Defense Minister Serge Sarkisian later in the day–announced that Armenia will soon be incorporated into a Russian-led single energy supplies network comprised of ten ex-Soviet states–including Azerbaijan and Georgia.

UES was awarded ownership of Armenia’s largest thermal power plant as part if an equities-for-debt Russian-Armenian agreement.

It then became the owner of five Armenian hydro-electric plants and took over the five-year management of the strategic nuclear power station at Metsamor in return for repaying the latter’s $40 million debt to Russian nuclear suppliers. The takeover was formalized by the two sides on September 18.

Chubais–who remains one of Russia’s most controversial figures for his pivotal role in the Russian privatization of the 1990s–denied that the energy deals gave Moscow an economic stranglehold on its main Caucasus ally. He said UES will make badly needed investmen’s in Armenia–make its power supplies more reliable and ensure sales of its energy to third countries. But he would not say how much the Russia’s intend to invest in its Armenian facilities.

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