World Bank Should Change Grant Process ARF Says

YEREVAN (Noyan Tapan)–The leader of the Armenian Revolutionary Federation parliamentary faction in Armenia Davit Lokian said Thursday that it was imperative for the World Bank to alter the course of its financial assistance to Armenia–in order to better serve the international finance organization’s aims at instituting reforms.

Lokian was briefing reporters on a meeting held earlier that day with World Bank officials and the ARF parliamentary faction–as part of the World Bank’s efforts to gauge the opinion all parliament factions on its future activities in Armenia.

Lokian reported that the ARF had suggested the World Bank to direct some of its funding to the agricultural sector.

Furthermore–a point of discussion centered around World Bank credits and gran’s in general. According to practice–all World Bank allocations are included in the annual state budget–which make it difficult to assess and establish the effectiveness of expenditure of the said funds. The ARF proposed that in 2001 the budge indicate which programs are being conducted through World Bank allocations.

In other matters–Lokian stated that a special commission to review energy allocations to Armenia’since 1992 was currently working with Armenia’s prosecutor general’s office and a report of the criminal case emanating from the commission’s report is scheduled to be presented to the National Assembly on Nov. 1.

The ARF leader added that the government-led commission was in the process of assessing mechanisms for returning sums to certain energy providers which were frauded by the government–as the commission’s findings indicated.

In a related matter–Lokian also commented on the set deadline for the shut down of the Medzamor nuclear power plant. In his remarks–Lokian said that the Armenian government and energy experts in Armenia have produced numerous documen’s–which provide myriad reasons for not shutting down the Soviet-era plan–which has become a primary source for energy in Armenia.

The main issue–Lokian said–was the lack of alternatives for energy resources–if the Medzamor plant were to shut down.

Lokian said–given the current rate of economic growth in Armenia–the practical date for the shut down of the power plan can be set between 2010 and 2013. He opined that it would more cost effective to begin the construction of a new plant in Medzamor’s vicinity.

The discussion was a part of a joint meeting between Armenian and Parliamentary Assembly of Council of Europe members–who raised the plant’s closure issue.

Lokian stressed that Armenia must become part of the European Union-sponsored energy programs–given that neighboring Azerbaijan and Georgia currently receive 20 million ecus annually.

He added that the European Union had expressed interest in the proposed gas pipeline between Armenia and Iran–with the project to be carried out within the EU’s INOGATE program.

The Armenian government approved on Thursday a three-year plan on the "financial adjustment" of the country’s energy sector. The plan calls for tougher measures for the repayment of debts owed to the energy companies by consumers. The total amount of unpaid electricity bills has reached $150 million. In particular–power distribution companies will now be allowed to cut electricity supplies even to government agencies failing to pay or exceeding their consumption limits.

The first deputy minister of energy–Robert Nazarian–told reporters after the cabinet session that the measures are vital for the normal functioning of the sector–which itself owes large sums of money to commercial banks and energy resource suppliers. The authorities decided earlier that the future owner of Armenia’s state-run energy distribution networks–will be responsible for only a fraction of their debts.

The plan also envisages tougher punishment for energy officials responsible for corruption and disproportionately high losses during the electricity transmission.


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