U.S. Eyes Participation In Armenian Nuclear Power Plant Construction

BYLINE: Lilit Gevorgyan

Global Insight
November 16, 2010

Yesterday the Coordinator for U.S. Assistance to Europe and Eurasia
and Co-Chairman of U.S.-Armenia Joint Economic Task Force (USATF),
Daniel Rosenblum, stated at a news conference in the Armenian capital
Yerevan that the U.S. administration hopes that the U.S. companies
will be interested in participating in the construction of a new
nuclear power plant (NPP) to replace the Soviet-era Metsamor. The U.S.

government extended US$2 million in 2007 for a feasibility study on
the modern and much safer NPP. Rosenblum held meetings with Armenian
economy minister Nerses Yeritsyan, where besides energy issues the
parties talked about U.S. assistance in improving the Armenian business
environment, particularly boosting competitiveness.

Significance:Metsamor NPP is very important for the Armenian economy
as it provides about 40% of the country’s electricity supply. It has
also vital strategic importance as the landlocked country has been
and remains in blockade by two of its four neighbours, Turkey and
Azerbaijan, over a the status of the Armenian-populated enclave of
Nagorno-Karabakh. While the South Caucasus is increasingly becoming a
hub of energy transport routes already in place or in making, Armenia
is solidly excluded from these routes’ maps since they originate
mainly from hostile Azerbaijan, opposed to any co-operation with
Armenia. Against this background the importance of Metsamor is even
more pronounced. It was closed down in the wake of the devastating
earthquake in 1988, fearing its destruction as the country is
seismically very active. However, the Armenian government had to push
aside these concerns due to dire economic consequences triggered by
energy shortages and reopen it in 1995. The European Union (EU ) has
since called on the Armenian government to close the aged NPP, but
the deadline for its closure has been deferred a few times as there
is no alternative energy supply. The current deadline of 2017 is also
unlikely to be met, given that the construction of a new NPP will take
some time. The project is worth US$5 billion and thus far the Armenian
government has managed to raise only one-fifth of it by concluding an
agreement with the Russian state nuclear energy corporation Rosatom’s
Atomstroiexport JSC. U.S. participation will certainly make the task
of fundraising for the new NPP easier for the Armenian government.

From: A. Papazian

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