WB: SELLING OF HRAZDAN TPS 5TH ENERGY UNIT TO GAZPROM IS PROFITABLE FOR ARMENIA

Regnum, Russia
May 1 2006

It is a profitable deal for Armenia to sell Hrazdan TPS 5th energy
unit to Russian Gazprom Company, Director of World Bank Yerevan office
Roger Robinson is quoted by a REGNUM correspondent as saying it at
April 28 news conference.

According to him, the Armenian government is going to hold public
hearings on the question and to clarify all details of the deal.

"Holding of public hearings and clarifying details are governmental
duty," he stressed, adding, that all questions on the deal will
be exhausted after discussions. Mentioning anxiety about the fact
that the Russian side becomes monopolist in Armenian power supply
system, Roger Robinson explained that foreign countries provide
public services in many countries of the world. In particular,
several foreign firms guarantees water supply in Great Britain, and
"there are no bad things in it." "Strong structure is necessary for
regulation of public services," the WB representative stressed.

According to him, mainly Russia supplies fuel for electrical energy
production, in particular, nuclear fuel for Armenian NPP, as well
as gas. "It is necessary to take into consideration current reality,
speaking about Armenian power supply system; and it may not be changed
within several minutes," Roger Robinson concluded.

It should be stressed, production infrastructure of Hrazdan TPS, except
for its 5th unit, was handed over to Russia several years ago in the
framework of Property in Exchange for Debt Program, which envisages
clearing off of Armenian state debt in the rate of $100 millions
through assignation of stocks of five enterprises to the Russian
side. Gazprom Holding and the Armenian government achieved agreement
on sale of legally independent production infrastructure of Hrazdan
TPS 5th unit in April 2006. According to the agreement, the unit
will be sold to ArmRosgazprom for $248.8 millions. Part of the sum -
$188.8 - will be used to compensate gas tariff difference, because
the Russian side raised price for the fuel from $56 up to $110 per
1,000 cubic meters. As it is expected, in future Hrazdan TPS 5th unit
will become element of Gas in Exchange for Electrical Power scheme,
to which Iran-Armenia gas pipeline will belong too. According to an
Armenian-Iranian intergovernmental agreement, Armenia will export 3
kWt/h of electrical power for every cubic meter of Iranian gas. Iranian
gas will begin to get into Armenia already in the end of 2006.

From: Emil Lazarian | Ararat NewsPress