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Russian Owner Sells Armenian Electric Utility: Ending months of speculation, Russia’s state-controlled energy conglomerate Inter RAO announced on September 30 the widely anticipated sale of Armenia’s debt-ridden power distribution network to another Russian group owned by an Armenian-born billionaire. In a joint statement, Inter RAO and Samvel Karapetyan’s Tashir Group said they have signed a corresponding deal and are awaiting its approval by the Armenian authorities. “The deal has already been approved by the Armenian government and will be completed after a decision by [Armenia’s] Public Services Regulatory Commission (PSRC),” read the statement. It did not reveal how much Tashir will pay for the Electric Networks of Armenia (ENA) utility. The announcement came two weeks after Inter RAO asked the government to allow the ENA’s sale to a Cyprus-registered shell company controlled by Marcuard Heritage, a Swiss asset management group. It was not immediately clear whether Marcuard is somehow involved in Inter RAO’s deal with Karapetyan. The Zurich-headquartered firm’s chief executive and co-owner, Sinan Bodmer, sits on the governing board of a Russian bank which is part of Tashir. In the meantime, Deloitte and Touche, a consulting firm conducting the audit of the Electric Networks of Armenia (ENA), completed the report of the first stage of consulting services concluding that the tariff hike is justified. “We analysed the current situation in Armenia: the country’s sole energy supplier appeared on the brink of default, largely due to a gap between the system operator’s forecasting and the load factor,” a Deloitte and Touche statement reads. The report, in particular, agreed that the Inter RAO subsidiary incurred additional losses last year because of a longer-than-expected stoppage of the Metsamor nuclear plant and a drop in hydropower generation. “Power generating companies had been affected by the financial deficit in the Electric Networks of Armenia, which in the short term would threaten the country’s energy stability. Under such conditions, PSRC’s decision to increase tariffs, aimed at the stabilization of the situation and conservation of reliable power supply to consumers, is, from our perspective, justified”, the report read. No To Plunder, a youth movement that organized the recent protests in Yerevan, was quick to dismiss Deloitte’s findings, standing by its view that consumers are being forced to pay for serious financial abuses within the ENA. The group was at the same careful not to immediately schedule fresh anti-government demonstrations. “We need to discuss this with [energy] experts,” one of its leaders, Maxim Sargsyan, told RFE/RL’s Armenian service. In their statement clearly timed to coincide with the release of the Deloitte report, Inter RAO and Tashir made clear that Karapetyan’s group and the Armenian government will jointly subsidize power supplies for at least one year to ensure that Armenian households remain unaffected by the price hike effective from August 1. The statement also announced that the new owner will implement an “anti-crisis program” aimed at ending the ENA’s massive losses. This will involve “tighter controls” over the ENA’s finances. Tashir will also embark on a “gradual modernization of the power grids’ equipment,” according to the statement. The ENA has more than $220 million in outstanding debts to Armenian power plants and commercial banks. (30/09 RFE/RL, Armenianow, Mediamax) 1 Oct 2015.

 

 

 

Armenia’s mining industry grows 31 percent in four months:  Armenia’s mining industry (including development of open-pit mines) saw a 30.9% rise in January-April 2015 from the year before. The major contribution of 98.9% was made by the mining of metal ores. It was 31.5% higher from the year before. Exports of mining products accounted for 35.7% of all exports. In January-April 2015 they increased by 9.6% to about $134.4 million. The growth was enhanced by the launch of the Teghut copper-molybdenum mine in Lori region in late 2014. It is the second largest in Armenia after the Kajaran mines. (01/06 ARKA).

 

2 June 2015.