Sergey Kondratyev, Senior Expert of the Energy and Finance Institute Fund:

 — The construction of a new NPP power unit is of critical importance for the development of Armenian economy

On August 20, Russia and Armenia signed an intergovernmental agreement on cooperation in the construction of nuclear power units in Armenia. The agreement was signed following the results of negotiations of Russian President Dmitry Medvedev and his Armenian colleague Serzh Sargasyan in Erevan.

Sergey Kondratyev, Senior Expert of the Energy and Finance Institute Fund:

During the last years the relationships between Russia and Armenia have significantly improved both in political and economic spheres. Balance and pragmatism in the relations between our countries helped to attract a considerable volume of investments in Armenian economy and significantly increase the trade turnover.

One of the priority directions is the development of a power complex, which engages a lot of Russian companies (Gazprom, InterRAO UES). Armenian NPP (ANPP), which is under control of InterRAO UES, plays a special role in the country’s economy. It generates about 40% of the country’s electric power (with the installed capacity ratio equal to 12.7%).

The construction of a new NPP power unit is of critical importance for the development of the republic economy, as it will help not only to compensate for ANPP power unit No.2, which is being put out of operation, but also to increase supplies of relatively cheap electric power (in comparison with electric power produced by gas thermal power plants), which is necessary for the economic development.

It was not a coincidence to select Russia as a partner for the construction of a new NPP power unit – as a matter of fact, Armenian NPP, constructed on the basis of Russian project, was able to preserve its working efficiency even after the Spitak earthquake.

The participation of Russia in the financing of the new power unit construction completely corresponds to the strategy of Rosatom State Corporation on the extension of external markets presence and acquisition of incomes both from NPPs construction and their further operation by means of a joint venture establishment. At the same time, the attraction of outside investors (which could finance up to 60% of the project cost) will help to diversify the risks and attract other concerned players — for example, Iranian electric companies. In recent years, on the background of a considerable increase of electric power consumption in central and northern regions of the country, Iranian energy system has incurred a power deficit, especially noticeable during peak hours. Even by now Iran buys more that 70% of Armenian export electric power.