Unrest in Armenia due to electricity price hike and the authorities’ promise to nationalize the Electric Networks of Armenia (ENA) may force Inter RAO to sell the company. The Russian holding company has already conducted negotiations with Russian businessmen of Armenian origin, including the owner of Tashir Group Samvel Karapetyan. But finding a new owner is not easy: the imbalance in tariffs led to ENA accumulating huge debts, while protesters still demand that the authorities not subsidize the company’s losses from the budget, Kommersant reports.
As a result of 10-day rallies and riots against energy price hike in Armenia, President Serzh Sargsyan said on June 27 that ENA may be nationalized and handed over to concessive management. Chief of Police of Armenia Vladimir Gasparyan said the state will acquire ENA in two months. Russian Inter RAO that owns the company, however, denies the report on its involvememnt in negotiations to sell ENA, accoridng to Interfax.
A source in Yerevan claims that Russian businessman Samvel Karapetyan plans to buy ENA, as negotiations had begun before the tariff hike. Armenian representatives of Tashir Group refuted the news.
The conflict broke out around the ENA after the Public Services Regulatory Commission (PSRC) of Armenia increased the electricity tariff by AMD 6.93 ($ 0,015) per 1 kWh. The company itself required to raise the prices by AMD 17 ($ 0,036). PSRC’s decision led to spontaneous demonstrations in Yerevan and other Armenian cities. President Serzh Sargsyan on Friday after a meeting with Transport Minister Maxim Sokolov (co-chairman of Armenian-Russian Intergovernmental Commission) said that the government will conduct an audit and cover all costs of electricity tariff hike until the results of the audit are known.
ENA justifies the need to increase the tariff due the fact that the Armenian NPP did not operate for 88 days, which is why the cheap energy was replaced with the expensive output of gas power plants. These amounts were not included in the energy balance in the calculation of tariffs, and the company had to take out loans with an interest of up to AMD 8 billion ($16.9 million), according to the source. ENA owes about AMD 23 billion ($ 48.6 million) to power generators.
A source explained that compensating the price hike is a temporary solution: the current growth rate will allow the ENA to maintain network performance, but will make it impossible to develop the power grid. In addition, the company’s application on tariff hikes intended to repay debts to power-generators till the end of the year, but now they will be able to return the debts only in 2016.
Protesters in Armenia perceive ENA and its management to be initiators of the conflict, and proposal to nationalize the company does not meet support among citizens, Kommersant says.