U.S. Envoy Urges Yerevan to Carry out Energy Deal

YEREVAN (RFE/RL)—John Heffern, the U.S. ambassador in Yerevan, has expressed hope that the Armenian government will not annul the planned sale of Armenia’s largest hydroelectric complex to a U.S. energy company.

In an interview with the 1in.am news service, Heffern warned that scrapping the $250 million deal finalized in January would send a “very unfortunate signal” to big Western investors and call into question Armenia’s ability to do business with them.

Under the takeover agreement signed on January 29, the New York-based group ContourGlobal was to pay $180 million for three hydroelectric plants making up the Vorotan Hydro Cascade and invest another $70 million in their modernization. The takeover, strongly welcomed by the U.S. government, was supposed to be formally completed by mid-April.

However, Armenia’s new Prime Minister Hovik Abrahamian, who took over on April 13, put the brakes on the deal, demanding changes in its terms. The Armenian press has since been rife with speculation that Russia is pressing Yerevan to cancel the deal and sell Vorotan to a Russian energy company instead.

Davit Harutiunian, the chief of the government staff, denied such claims on June 26. Harutiunian told RFE/RL’ Armenian service (Azatutyun.am) that the Armenian side wants to renegotiate the deal only because it believes that some of its provisions run counter to Armenian law. He said Abrahamian assured Heffern at a recent meeting that Yerevan remains “interested in selling the plants to the American company.”

Heffern would not be drawn on contentious details of the Vorotan deal criticized by Armenian opposition parties and former President Robert Kocharian, arguing that the U.S. Embassy in Armenia is not a party to the accord. Still, he described ContourGlobal as a “responsible company” and stressed the importance of what would be the first-ever major Western involvement in the Armenian energy sector.

“It’s a complicated deal because it’s a big deal. It’s the first Western investment in the Armenian energy sector,” Heffern told 1in.am. He said he therefore hopes that the deal will go through.

Heffern also emphasized that Vorotan’s planned sale is a “different kind of a deal” compared to energy agreements concluded by the authorities in Yerevan until now.

Those agreements have left much of Armenia’s energy sector under the control of Russia’s Gazprom and RAO Unified Energy Systems giants. The latter have acquired most of their Armenian assets through highly controversial swap arrangements, in return for Moscow writing off Yerevan’s debts and supplying Russian natural gas to Armenia at discount prices

Sarkisian Hails ‘Growing’ U.S. Presence In Armenia
In a congratulatory letter to President Barack Obama sent on Friday, President Serzh Sarkisian reaffirmed his stated commitment to deepening Armenia’s ties with the United States and praised “growing American involvement” in the Armenian economy, RFE/RL’s Armenian service (Azatutyun.am) reported.

“We deeply cherish our friendship with the United States and are pleased that through the joint efforts we have elevated our bilateral partnership to a qualitatively new level,” Sarkisian wrote in the Independence Day message made public by his office.

“We attach great importance to the deepening of the multifaceted Armenian-American cooperation and value your assistance aimed at the success of the undertaken reforms and establishment of a greater democracy in Armenia; we also welcome the growing American involvement in our economy,” he said.

Sarkisian also praised the important U.S. role in long-running international efforts to resolve the Nagorno-Karabakh conflict. He expressed hope that Washington will carry on with its “active mediation.”

In a similar message to Obama in July 2013, Sarkisian declared that U.S.-Armenian relations are now closer than ever before and serve as a “strong prerequisite” for Armenia’s security and economic development. He wrote to the U.S. president less than two months before unexpectedly deciding to make Armenia part of a new Russian-led alliance of ex-Soviet states. John Heffern, the U.S. ambassador in Yerevan, said afterwards that Sarkisian’s U-turn will have no fundamental impact on U.S.-Armenian relations.

Incidentally, Sarkisian visited Heffern’s residence in Yerevan on Friday to personally congratulate the envoy on the U.S. national holiday. The presidential press service did not report other details of their conversation.