ArmRosGazprom (ARG), Armenia’s national gas distribution company, has paid back half of a $40 million loan provided by the government, Armenian finance minister Tigran Davtian said today. Speaking at a news conference he said the company will repay the loan fully early next year.

The loan, repayable in six months at the annual interest rate of 11 percent, had been approved by the government during a cabinet meeting held in the northern Armenian city of Vanadzor on October 1. A government statement issued after the meeting said it would be allocated from the state budget “in the fourth quarter of 2009.”

A statement by ARG spokeswoman said the loan would be used for financing the ongoing construction of a major thermal-power plant and renovation of natural gas pipelines connecting Armenia to Iran.

Source: arka.am

Armenia has cleared the way for a new nuclear power plant, despite green groups' objections that its location could put the country's capital at risk.

Earlier this month, the government approved the creation of Atomstroyexport, a joint Russian-Armenian company that will own the station.

"Today we are taking a political decision, we are giving our agreement to the creation of a joint venture with our Russian partners," said Prime Minister Tigran Sargsyan on December 3.

Armenia plans to finish the new generating unit by 2016, and it will replace the Metsamor plant, which produces 40 percent of the country's power but is nearing the end of its life. Without the nuclear plant, Armenia would be largely dependent on gas imported from Russia or Iran.

"The new nuclear power station will become a security zone for Armenia in the energy system. A nuclear reactor is necessary as an energy resource that can ensure the self-sufficiency of the country," said Sevak Sarukhanyan, an economist and deputy director of the Noravank think tank.

Sargsyan said the new station is crucial to efforts to revive Armenia's economy, which has suffered both from the post-Soviet collapse and the blockade imposed by Azerbaijan and Turkey.

"If we do not build the nuclear power station then, of course, our competitive position will significantly worsen," he said.

Construction of the plant will take five or six years, and it should have a working life of 60 years, which will guarantee Armenia's electricity supply far into the future.

Ecological groups, however, remain strongly opposed to the plans. Hakob Manasaryan, head of the Union of Greens, said the government did not explore other energy options in its rush to approve a new nuclear plant. He worries that Armenia, which is prone to earthquakes, could see a disaster such as the one that struck Ukraine's Chernobyl reactor 23 years ago.

"I have the impression that the officials are thinking only of the next 15 or 20 years. A new structure, with a capacity of 1,200 megawatts should be at least 100 to 150 kilometers (60 to 90 miles) from big cities. The existing Metsamor station, which is just 20 km in a straight line from the capital, does not even meet this condition," he said.

"There is not one safe working reactor. Of course it is good if it is super-modern, which means, it is less dangerous, but who can vouch for that? And with a capacity of 1,200 megawatts, the consequences of the risk could be more significant. The construction of a new reactor in the same place [as the Metsamor plant] is even more dangerous," said Manasaryan.

But Areg Galstyan, deputy energy and natural resources minister, said new reactors are built to far higher safety standards than Chernobyl-type nuclear power stations, and that the ecologists have nothing to worry about.

The Metsamor power station sits in the Ararat Valley, in the very heart of Armenia, and is surrounded by the towns of Armavir, Echmiadzin and Metsamor. Its first unit started producing power in 1976, and the second in 1980.

According to Armenia's Department of State Atomic Control, the structure was strengthened after the devastating earthquake of 1988. The waste is not stored permanently on site, but is sent to Russia for disposal.

Sarukhanyan said an atomic plant is probably the cleanest possible option for Armenia – compared to a fossil fuel or hydro station – and would allow the country to become a major exporter to neighboring countries. That could even include selling power to Turkey, if a peace deal agreed this year is ratified.

"What would happen to Armenia, if there is another war in Georgia? You can say the same thing about Iran. If, because of the tense political situation, our gas supplies are cut, then we would face an energy collapse," he said.

At the moment, Armenia's electricity network has the capacity to export 200 megawatts to Turkey. After the two countries normalize their ties, Yerevan could upgrade the power lines and become a major source of energy for eastern Turkey, which is growing quickly.

Stepan Safaryan, a parliament deputy from the Heritage party, said this could prove a major source of revenue for Armenia.

"All predictions about global energy resources, and particularly for electric energy, in the next decade show a tendency towards growth. There are developing countries in the region, therefore in the long term we have not only a market but also chances of creating our own electricity," he said.

Sargsyan in spring even announced that Turkish companies would be welcome to participate in the tender for the plant's construction, which was organized by Australia's Worley Parsons. Nationalists were shocked by his comments at the time but Sarukhanyan said they need not have worried, since the only serious bidder for the project was the Russian State Atomic Energy Corporation.

Sarukhanyan said top western companies would not be prepared to invest such large amounts of money in exchange for a non-guaranteed return.

"For Russia it is a realistic decision, however, since it will have a leading position in Armenia's energy sector. For a French or American company, it would be a doubtful deal, since the Armenian economy remains closed," he said.

But Safaryan worries that Armenia is becoming over-dependent on Russia, which already dominates much of the Armenian economy, including the telecom and electricity sectors.

"This will lead to a deeper dependence by our country with all the political consequences inherent in that," he said. "In this, like in any other sector, the existence of an alternative and of diversification is a question of independence and sovereignty."

Source: http://www.ens-newswire.com/ens/dec2009/2009-12-28-01.asp

Yerevan Office head of the World Bank, Aristomene Varoudakis told journalists today that there are plans to release a $160 million loan to Armenia in 2010 for implementation of 8 projects.

‘We plan that in 2010 the WB Board of Directors will approve eight programs which will be ratified by Armenian National Assembly,’ he said.

Aristomene Varoudakis said $25 million of this sum will be channeled to support the budget in order to help reform tax and customs systems and strengthen the capacities of agencies dealing with competitiveness policy.

Some $7 million will be allocated to Social Investment Funds to support implementation of 37 projects, $5 million for social security administration improvement, particularly, for modernization of regional social security centers.

Besides, $10 million will be channeled to support a new project to upgrade the public sector, increase the transparency degree in the public service system and improve electronic management of services for population.

Some $25 million are earmarked for IT sector, particularly, for construction of a technology park in Gyumri, $43 million will be directed for construction of a road from Yerevan to Vanadzor and Bagratashen as part of North-South highway.

Also $36 million will be directed at restoration of electrical power transmission lines and $14 million for rural development projects.

According to Aristomene Varoudakis, under the Country Partnership Strategy (CPS) with Armenia, which provides the framework guiding for the World Bank's assistance to Armenia for 2009-2012, Armenia will receive $550 million, of which $100 million will be channeled to the budget and the rest will go to support government’s investment projects.

Russian energy giant GazProm halted gas supplies to Armenia and two other areas in the Caucasus after two bombs were found close to a pipeline in southern Russia on December 13. However, flow of gas was once again restored at 21:30 local time as police investigated the site.

A trunk gas pipeline in Russia’s Ingushetia region was shut down late on Sunday after several explosive devices were found nearby, a police official in Ingushetia told Reuters.

The stoppage affected customers in Russia’s North Ossetia and Ingushetia regions as well as Armenia, which gets about 2bn cubic metres of gas annually from Russia, Russian news agencies reported.

A spokeswoman for the Armenian subsidiary of Russian gas monopoly Gazprom, ArmRosGazprom, said gas had been cut but that domestic consumers would not be affected.

”We will use gas from our storage facilities until the restoration of supplies,” she said.

The mainly Muslim region of Ingushetia, which borders Chechnya, has seen a surge in attacks by Islamist rebels in recent months.

Russian supplies to Armenia transit through Georgia, which has not been affected by the cut, a spokeswoman for the Georgian Oil and Gas Corporation told Interfax news agency.

A spokesman for Russia’s Gazprom said he was not immediately able to comment on the cut in supplies.