YEREVAN (RFE/RL) — A U.S. company announced on Wednesday its intention to participate in the planned construction of a major hydroelectric plant in Armenia initiated by Samvel Karapetian, a Russian-Armenian billionaire businessman.
Lok Home, the president of the Ohio-based Robbins Company, and a top executive of a Karapetian-owned company signed a relevant memorandum of understanding at a ceremony attended by Armenian Energy Minister Ashot Manukian and the U.S. ambassador in Yerevan, Richard Mills. Manukian hailed the development, saying that the new hydroelectric plant will strengthen the country’s “energy security.”
The 76-megawatt facility is due to be built on the Debed river flowing through Armenia’s northern Lori province. It will be located near Shnogh, a village 20 kilometers south of the Georgian border.
The Armenian government gave the green light to the plant’s construction in early August. It is expected to be the first business project launched by the Investors Club of Armenia (ICA), an investment fund set up by Karapetian in January.
Robbins, which is one of the world’s leading manufacturers of giant tunnel-boring machines, is understood to be eying a sizable minority stake in the Shnogh project. Officials said during Wednesday’s ceremony that it would essentially participate in the project by building a 22-kilometer-long water tunnel that would be part of the future plant.
The ICA has so far pledged to invest $22.5 million in the planned construction which would cost an estimated $150 million. It hopes to attract the rest of the required funding from other private investors as well as international lending institutions.
A source familiar with the project told RFE/RL’s Armenian service (Azatutyun.am) that the plant’s construction will be contingent on positive findings of an independent feasibility study that will be conducted in the coming months.
“This is the first step towards increasing the volume of energy produced by our domestic renewable sources,” Manukian said at the ceremony. The government, he said, aims to raise hydropower’s share in Armenian electricity production to 50 percent in the next few years.
That proportion has already risen from about 20 percent to more than 30 percent over the past decade.
Manukian also stressed the importance of U.S. involvement in the Armenian energy sector. “I am confident that our investment projects will multiply soon, including through the direct involvement of Ambassador Mills,” he said.
Mills also spoke at the event, calling the preliminary agreement between Robbins and the Debed Hydro operator a major “achievement” of U.S.-Armenian relations.
The envoy declared in June that U.S. energy firms could invest billions of dollars in power generation in Armenia if the authorities in Yerevan open it up to competition. “Armenia has a lot of potential for renewable energy development and American investors and companies are showing a strong interest in coming here to develop that potential,” he said.
One U.S. company, ContourGlobal, is already involved in the Armenian energy sector, having purchased the country’s largest hydroelectric complex two years ago. The U.S. government strongly supported the $250 million takeover of the Vorotan Hydropower Cascade.
State-run Russian companies still have much stronger presence in the sector. They are Armenia’s principal suppliers of natural gas and nuclear fuel.