YEREVAN (Arka)—Armenian energy and natural resources minister Yervand Zakharyan told a news conference Wednesday that a landmark deal finalizing the sale of Armenia’s Vorotan Hydro Cascade to a US-based company, ContourGloba, will be signed within the next two weeks.
The minister said all the “contentious issues” which the original agreement had have been resolved and the new terms are “quite profitable for Armenia.”
The deal was signed on Jan. 29, 2014, with ContourGlobal under which the US-based company is to purchase and modernize the series of hydropower plants along the Vorotan river, (known as the Vorotan Hydro Cascade), which produce a total of 405 megawatts of power in southern Armenia, for a purchase price of $180 million.
This will be the largest single U.S. private investment in Armenia’s history and the first U.S. investment in Armenia’s energy sector. The Vorotan Hydro Cascade accounts for roughly 15 percent of the installed capacity of Armenia’s electricity production system and provides sufficient energy to power 250,000 homes.
Under the terms of the agreement, ContourGlobal Hydro Cascade, a direct and wholly owned subsidiary of ContourGlobal, will own and operate the three hydroelectric facilities located on the Vorotan river and will supply power to the Armenian grid under a long-term power purchase agreement.
ContourGlobal will also invest $70 million over the next six years in a refurbishment program to modernize the plants and improve their operational performance, safety, reliability, and efficiency. ContourGlobal expects the modernization to create 150 near-term jobs in addition to the 150 long-term technicians employed at the plants.
Zakharyan also confirmed Wednesday rumors that the Russian company, Inter RAO UES, the whole owner of Armenia’s national power distributing company Electric Networks of Armenia (ENA), is planning to sell the, adding, however, that no final decision has been made yet.
Armenian media has been rife with stories claiming that the networks would be sold to Russia-based Tashir group of companies, owned by an ethnic Armenian billionaire Samvel Karapetyan. However, Samvel Karapetyan’s brother, Karen, who is a member of the Armenian parliament, denied yesterday in a statement these rumors.
The minister stressed that Inter RAO UES may sell only part of the company. He, however, added that his ministry did not have “real” information confirming Russian plans to sell the power distributor.
Zakharyan said the ENA is a privately-owned company that can negotiate the sale with different companies. He said after the talks are fleshed out, the company must notify the ministry about it.
The minister stressed that the final say belongs to the government that may prohibit the sale.