Vahagn Khachatryan on Refusing from Russian Loan for Lifetime Extension of ANPP Second Power Unit

Vahagn Khachatryan on Refusing from Russian Loan for Lifetime Extension of ANPP Second Power Unit

On June 11, the Armenian government decided to provide a budget loan of 63 billion 200 million AMD from RA state budget to the Armenian Nuclear Power Plant CJSC to finance the lifetime extension of the second power unit of the ANPP, renouncing the remaining $ 70 million of the Russian loan. Reminder: in 2015 Russia has signed a $ 270 million loan agreement with Armenia to provide a $ 30 million grant to extend the lifetime of the ANPP's second power unit.

EcoLur talked about this topic with the experts in this field. In this publication we present the interview with Economist Vahagn Khachatryan:

- The Armenian government refused from the Russian loan for the ANPP modernization and decided to allocate funds from the state budget for that purpose. Is this the best way to save money? 

Vahagn Khachatryan:

- I know one substantiation for refusing from the rest of the Russian loan, according to which, if we continued to receive the loan from Russia in the same way, there would be a change in the tariff. There is logic in this substantiation in the sense that we will use our money now, that is, this will create an internal debt. Domestic debt is always more profitable, because we are the owner of that sum, the bond. This is a more preferable option, especially since now the interest rate on government bonds has dropped a lot.

 - How realistic is the allocation of that sum from the state budget under the conditions of COVID 19? 

Vahagn Khachatryan:

- They can give US $ 70 million, and in the future, if budgetary problems arise, there are funds for that purpose as well. After all, they will not give that 70 million in a year. No one has the right to stop that work, and professionally speaking, it is simply not possible to interrupt any work there. The nuclear power plant is on one side, Armenia is on the other: this is how it should be placed on scales. Solar energy has its significance, but it can never have the same significance as a nuclear power plant.

The government seems to take necessary steps, but I can see serious problems in the strategic approaches. We do not have a specified energy strategy, there is a strategic standpoint until 2036.  In the previously discussed version, for example, there were two options for building a new nuclear power plant, according to capacity. In addition, in terms of having nuclear energy in the previous energy strategy, the approach was clear that we should have. A draft version was published this February. Now it is necessary to understand whether or not there is nuclear energy in that strategy. If yes, what will be the development of nuclear energy: the reconstruction of the old one or the construction of the new one?

It is time to answer that question under these difficult socio-economic conditions, because the nuclear power plant is operating, it is in its natural process. Now, to what extent we will make managing that natural process useful depends on the actions of our government.

- Can the refusal from the Russian loan affect the ANPP safety under the conditions when "Rosatom" continues to carry out modernization works?

Vahagn Khachatryan:

- It is very good that "Rosatom" is carrying out the modernization work. If there are professional organizations in Armenia that can do that work, they can conduct them, however, I am convinced that we do not have that experience, we could not have it. Companies such as Rosatom or Framatom, which have built and maintained a number of nuclear power plants around the world, in this case, taking into account their professional knowledge, can perform the planned work at a high level.

If we intend to continue to operate the nuclear power plant for 5 years, whereas the maximum until 2036, we must be confident that the safety of the nuclear power plant is 100% guaranteed. In this regard, one of the questions should be who will be the supervisors of the work. Usually there is a customer, in this case the Republic of Armenia. I am not convinced that we have so much professional potential that we can supervise the work by Rosatom. The biggest problem so far remains the reactor - how safe is it?

The main factor is whether the reactor is able to continue its operation, what is the extent of physical amortization? The peculiarity of this renovation is that this assessment should be given. Experts are concerned that the materials purchased and the works performed do not correspond to the real prices, there are abuses. We are deprived of the opportunity to give an alternative expert assessment.

Mechanisms need to be introduced in place to ensure that supervision is flawless and provide complete guarantees. The nuclear power plant has always cooperated with the French "Framatom" company. According to some information, they have to give a conclusion on the further operation of the reactor, the terms of further operation, both before 2026 and 2036.

- The main expenses for ensuring the security of the residents of the communities in the area of ​​the ANPP impact are vested on those communities. Is it possible to direct a part of the state loan to the construction of shelters and the purchase of necessary items - iodine preparations, gas masks? 

Vahagn Khachatryan:

- The issue of security is very important, it is not only everyday security. Any country that has a nuclear power plant and nuclear weapons must ensure the security of the people. We do not have the minimum. The 25 communities involved in the operation of the nuclear power plant should receive subsidy or other assistance. Living in a risk zone must be paid for by the state. There are two ways, the state can do it - either from the state budget, or the state can do it on behalf of the nuclear power plant, because the nuclear power plant is a state enterprise.

However, the revenues of the nuclear power plant have been taken away from it indirectly for many years. The incomes of the nuclear power plant were taken and the salaries of the employees of the Nairit plant were given. The social and security issues of 25 communities should become a state issue. There should be a law on the development of a nuclear power plant or nuclear energy. The nuclear status must be raised to the level of law, everything, especially funding, must go in a separate line.

There is a problem as well: we are experiencing a problem with professional staff today, from the highest-ranking officials of the nuclear power plant to the employees who do not need to have professional knowledge. This issue should also be on the agenda.

July 30, 2020 at 14:04