U.S. company buys Armenian power plants in $250 million deal

YEREVAN Wed Jan 29, 2014 1:55pm EST

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YEREVAN (Reuters) - U.S. power company ContourGlobal said it will acquire three hydroelectric power plants in Armenia in a $250 million deal.

The company said it had bought the Vorotan Hydro plants for $180 million and planned to invest an additional $70 million, making it the largest single U.S. private investment in the Caucasus country of 3.8 million.

The deal may decrease Armenia's dependence on Russia, Yerevan's main trading partner and biggest foreign investor which is due to boost its control over the country's natural gas infrastructure.

The Vorotan Hydro Cascade complex is a series of three hydroelectric power plants totalling 405 megawatts on the Vorotan river in southern Armenia.

It accounts for about 15 percent of Armenia's power capacity and provides energy for 250,000 homes.

A long-term power purchase agreement was signed on Wednesday between ContourGlobal and the Armenian government.

The agreement says the company will invest $70 million over the next six years in a refurbishment program to modernize the plants and improve their performance and safety.

Armenia plans to join a customs union led by its former Soviet master Russia and has approved a deal under which the Russian state gas export monopoly Gazprom (GAZP.MM) will take over full ownership of its subsidiary ArmRosgazprom, by acquiring the remaining 20 percent of shares from Armenia.

Russia has invested $3 billion in the country with a GDP of $9.9 billion in 2012, according to the World Bank.

(Reporting by Hasmik Mkrtchyan; Writing by Margarita Antidze; Editing by David Evans)

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Comments (1)
Landau1908 wrote:
Vorotan Hydro Cascade (VHC) was built to give a fresh breath to Armenia from it,s energetic dependence from Russia. But as wee see the government had to sell VHC to U.S. company. Official Yerevan makes everything to ruin the future of armenians. It sells all the strategic spheres of country to foreighn companies. Armenian governemt do not give a chance to it,s own people. Armenians speedely lives Armenia. For term of aprx. 20 years after regaining of it,s independce Armenian government makes it,best to prove that this country is not worse of independence and prosperity. It occupied territories of neighboring country, have terr.claims to other neighbors, supports terrorism and separatism on governmental level and with all of this willingly becomes a part of another country. In other words it fulfills the interests of more stronger ally even if it costs interests and inpendence of Armenia. Armenia undoubtedly plays a role of a destructive element in the region.

Feb 03, 2014 3:12am EST  --  Report as abuse
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