Ex-president calls for revision or cancellation of a deal to sell Vorotan hydropower plant to US-based company

Ex-president calls for revision or cancellation of a deal to sell Vorotan hydropower plant to US-based company

YEREVAN, June 23. / ARKA /. An ex-president of Armenia, Robert Kocharyan, has called for revision or cancellation of a deal concluded by the government whereby it sold the Vorotan hydropower plant in southern Armenia to US-based ContourGlobal Hydro Cascade.

On January 29 the US-based ContourGlobal and Armenia’s government signed an agreement for ContourGlobal to purchase and modernize the Vorotan Hydro Cascade, a series of three hydroelectric power plants totaling 405 MW on the Vorotan River in southern Armenia, for a purchase price of $180 million.  

That acquisition represented the largest single U.S. private investment in Armenia's history and the first U.S. investment in Armenia's energy sector. The Vorotan Hydro Cascade accounts for roughly 15 percent of the installed capacity of Armenia's electricity system and provides sufficient energy to power 250,000 homes.

"The sale agreement is unacceptably asymmetrical ignoring the interests of Armenia and making it very vulnerable to all possible legal disputes ... The impression is that the Armenian side was not at all involved in the drafting of the agreement or there was a reconciled game against Armenia. It is not yet too late to reconsider the agreement, or cancel the deal at all,” Kocharyan said in an interview with Yerkir.am.

According to the ex-president, "the illegality of the deal  is so obvious that the officials involved in it are unlikely to ever be able to avoid responsibility." 

"The most attractive electric power generating facility in Armenia was sold at a highly dubious price, ignoring the requirements of the legislation (bypassing parliament). It appears that all the three power plants were sold as old office furniture", he argued.

The only positive fact in this transaction, according to Kocharyan is bringing an American company to Armenia’s energy sector.

Under the terms of the agreement, ContourGlobal Hydro Cascade, a direct and wholly owned subsidiary of ContourGlobal, will own and operate the three hydroelectric facilities located on the Vorotan river and will supply power to the Armenian grid under a long-term power purchase agreement. Contour Global will also invest $70 million over the next six years in a refurbishment program to modernize the plants and improve their operational performance, safety, reliability, and efficiency. Contour Global expects the modernization to create 150 near-term jobs in addition to the 150 long-term technicians employed at the plants.

Contour Global is a New York based international power-generation company with approximately 3500 MW in operations or under construction in 17 countries and on four continents. ContourGlobal's 1650 employees manage, own and operate a portfolio of 33 power plants utilizing a wide range of fuel types and technologies including renewable energy production based upon Hydro, wind, solar and biomass, as well as an extensive fleet of conventionally powered thermal power plants. 

In the wider Eastern Europe area, ContourGlobal currently owns and operates approximately 1100 MW of power generation businesses in Bulgaria, Ukraine, Romania, and Poland and eagerly anticipates adding the plants in Armenia to this portfolio. -0-

17:56 23.06.2014

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