Why Armenia Refused from Russian Loan for ANPP Second Power Unit Lifetime Extension?

Why Armenia Refused from Russian Loan for ANPP Second Power Unit Lifetime Extension?


On June 11, the Armenian government decided to provide a budget loan of 63 billion 200 million AMD from the state budget to the Armenian Nuclear Power Plant CJSC to finance the lifetime extension of the ANPP second power unit. Thus, Armenia refuses from a Russian loan to modernize the ANPP. In 2015, Russia signed an agreement with Armenia to provide US $270 million loan and US $30 million grant to modernize the second power unit of the ANPP.

The electricity productivity of the Armenian Nuclear Power Plant has increased by 10-15% due to the modernization.


 Harsher Conditions by Russian Party

· In February 2020, the Russian Ministry of Finance submitted to the Armenian side a protocol on the two-year extension of the term, with stricter conditions. In particular, the protocol stipulated that 80% of the loan should be directed to acquisitions from Russian companies (works, devices, equipment, services, etc.), apply an interim commission fee for 1% of the unused loan amount in 2020, as well as loan insurance should have been carried out, the amount of which was unknown.

· The Russian side is entitled to consolidate the main loan, interest on the loan, interest accrued on the overdue liability in case of non-payment of overdue obligations within 180 calendar days, and to declare the consolidated liability for repayment in an immediate manner.

· It has been proposed to pay additional funding of up to $ 6.5 million per year, as it will take three years to complete the planned work, and the Project Management Fee can reach as high as $ 19.5 million.

The Positioning of the Armenian Party

• The approach of the Russian side creates a monopoly position for Russian producers and service providers, limits the possibility of obtaining quality goods and services for significantly lower prices, as well as the involvement of Armenian organizations.  

• Assessing the Russian side's proposal, the financial resources needed for the successful completion of the project are about $ 163 million.

• The project could be completed with $ 123 million in funding, resulting in up to $ 29 million in savings, including a $ 10.7 million grant loss.

Current State of Affairs and Risks

If no appropriate financial means are found, for the completion of the lifetime extension of the second power unit of the ANPP, this will lead to the deviation of the schedule of planned-precautionary repair works in 2021 and subsequently, the refusal by RA Nuclear Safety Committee to issue a new license to the Armenian Nuclear Power Plant.


June 11, 2020 at 17:39