World Bank Official Cautions Against More Russian Takeovers

YEREVAN (RFE/RL)–The Armenian government should avoid transferring more energy facilities to Russia’s state-run RAO Unified Energy Systems (UES) utility and ensure that the latter runs its Armenian holdings efficiently–a World Bank official in Yerevan said on Tuesday.

UES has taken over 80 percent of Armenia’s power generating capacities as a result of a series of equities-for-debt agreemen’s that cleared Yerevan’s $100 million debt to Moscow over the past year. The expanding electricity giant now owns the country’s largest thermal power plan and five hydro-electric facilities. It was recently granted five-year management rights to the nuclear power station at Metsamor.

According to recent press reports–the Russia’s would like to get hold of the remaining 20 percent of the Armenian energy sector–including three major hydro-electric plants and the nationwide power distribution network. UES chairman Anatoly Chubais did not confirm the reports during a recent visit to Yerevan–saying that his company wants to concentrate on its existing Armenia holdings for the moment.

"A continuation of this trend would be undesirable," said Gevorg Sargsian–a World Bank official dealing with infrastructure projects in Armenia. "We have nothing against RAO UES or any other foreign company. We just want the remaining power facilities to be privatized in a more diversified way."

The World Bank and other Western lending institutions have made an overall positive assessment of Russian-Armenian agreemen’s–arguing that Armenia’s debt burden has been significantly eased as a result.

Sargsian similarly warned that UES ownership of the Armenian power plants would become "risky" if the Russia’s do not manage them in a transparent fashion. He said an Armenian state body regulating the energy sector and other "natural monopolies" should closely follow their operations.

The Chubais-led UES–meanwhile–has ambitious plans to restore a single energy network in the region and hopes to export Armenian electricity to Turkey before the resolution of the Mountainous Karabagh conflict.


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