The government plans to authorize a company belonging to Samvel Karapetian, a Russian-Armenian billionaire, to manage Armenia’s state-owned electricity transmission network for at least five years.
The deal tentatively approved by the government on Thursday will further expand Karapetian’s presence in the Armenian energy sector.
The Armenian-born tycoon already owns the country’s national electric utility and largest thermal power plant. Also, business entities controlled by him intend to build two major hydroelectric plants.
Speaking at a weekly cabinet meeting in Yerevan, Deputy Minister for Energy Infrastructures Vartan Gevorgian said the planned deal will make the energy sector more efficient by “synchronizing” Armenia’s power transmission and distribution networks. He said Karapetian’s Tashir Kapital company based in Russia will also attract significant capital investments in the High-Voltage Electric Networks (BETs) and “optimize” its operational expenditures.
A separate government statement clarified that Tashir Kapital will obtain large-scale loans that will be spent on refurbishing electricity transmission lines and substations and building new BETs facilities. In particular, it said, the new operator will complete the ongoing construction of a new high-voltage line that will connect Armenia to Georgia.
Armenia - An electricity distribution facility.
Gevorgian made clear that the signing of the management contract is conditional on Tashir Kapital submitting a plan of concrete actions and investment commitments by the end of this year. “The agreement will come into effect only after the trust management program is approved by the government,” he said, according to the Arka news agency.
The development comes nearly two years after Karapetian’s Tashir purchased the debt-ridden Electric Networks of Armenia (ENA) utility and a large power plant in the Armenian town of Hrazdan from Inter RAO, a state-run Russian energy company.The new owner claims to have already cut ENA’s massive losses.
Another company owned Karapetian as well as an investment fund which he and other wealthy Russian businessmen of Armenian descent set up recently are due to start building soon a 76-megawatt hydroelectric in Armenia’s northern Lori province. The government gave the green light to the $150 million project on August 10.
The fund, called the Investors Club of Armenia (ICA), also plans to at least partly finance the planned construction of a 100-megawatt hydroelectric plant on the Arax river marking Armenia’s border with Iran. The Armenian and Iranian governments have long been trying to implement the project.
Karapetian is increasingly involved in Armenia’s energy sector amid the declining presence there of state-owned Russian energy giants. With the 2015 sale of ENA and the Hrazdan plant, Inter RAO essentially pulled out of the country. Another Russian company, RusHydro, reaffirmed in June its intention to sell off Armenia’s second most important hydroelectric complex belonging to it.
RusHydro’s withdrawal would leave only one Kremlin-controlled company, Gazprom, owning a power-generating facility in Armenia. Gazprom is also the country’s principal supplier of natural gas.
Armenia - Prime Minister Karen Karapetian (R) and Russian-Armenian businessman Samvel Karapetian announce the creation of a Russian-Armenian investment fund in Yerevan, 25Mar2017.
Karapetian, 52, was born and raised in Armenia. He moved to Russia in the early 1990s, making a huge fortune there in the next two decades. His Tashir Group conglomerate comprises over a hundred firms engaged in construction, manufacturing, retail trade and other services. With total assets estimated by the “Forbes” magazine at $3.5billion, he is most probably the richest ethnic Armenian in the world.
The Russian-Armenian tycoon is widely regarded as a figure close to Prime Minister Karen Karapetian (no relation). The latter lived in Russia and held senior positions in Gazprom subsidiaries before President Serzh Sarkisian appointed him to his current post last September.
Samvel Karapetian and three dozen Russian-Armenian entrepreneurs issued a joint statement when Karen Karapetian paid an official visit to Moscow in January. They voiced “full support” for “profound reforms” promised by the premier and expressed readiness to “participate in business projects with the Armenian government.”