YEREVAN, March 13. / ARKA /. A former Yerevan mayor Vahagn Khachatryan from the opposition Armenian National Movement has denounced today the Armenian government for selling a major hydropower plant to a US-based company.
The Vorotan Hydro Cascade, a series of three hydroelectric power plants totaling 405 MW on the Vorotan River in southern Armenia was sold January 29 to the US-based ContourGlobal for a purchase price of $180 million.
This acquisition represents 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.
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.
ContourGlobal 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. ContourGlobal expects the modernization to create 150 near-term jobs in addition to the 150 long-term technicians employed at the plants.
However, Speaking at a news conference Khachatryan argued that the hydropower plant does not need this amount of investment and therefore, there was no need in selling it.
According to him, the cascade can serve another 100 years without major modernization, although energy and natural resources Armen Movsisyan would say that its equipment installed 40 years ago needs to be replaced by modern one.
Khachatryan expressed concern that the new owner of the plant may raise the price of electricity generated by the cascade because under the sale contract the US company is obliged to increase its profitability. Currently Vorotan Cascade sells its electricity at 8.2 drams for 1 kWh
Khachatryan also questioned the legality of the deal saying also it could have been sold twice the price offered by the US company.
ContourGlobal 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. ($1 – 414.94 drams). -0-