YEREVAN (Arka)—Armenian energy and natural resources minister Yervand Zakharyan told the country’s parliament today that a deal whereby the Vorotan Hydro Cascade is to be sold to a US-based company will be finalized within one month.
A deal was signed on Jan. 29 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.
According to the Armenian government, the sides are still negotiating details of the deal.
Meanwhile, Armenia’s energy and natural resources minister Yervand Zakharyan confirmed Wednesday that Russia has pledged to provide $300 million in assistance to Armenia to extend the service life of the Metsamor nuclear power plant until 2026.
The minister said an agreement is to be signed later this year. He said $270 million of that amount will be received as a loan and the rest as a grant. Armenia’s Mestamor nuclear power plant, located some 30 kilometers west of Yerevan, was built in the 1970s, but was closed following a devastating earthquake in 1988. One of its two light-water reactors was reactivated in 1995. Armenian authorities want to replace the aging facility with a new plant that is supposed to operate at twice the capacity of the Soviet-constructed facility, generating currently some 40 percent of Armenia’s electricity. But the government has yet to attract funding for the project that was estimated by a US-funded feasibility study to cost as much as $5 billion.