Main Reasons for Probable Increase in Electricity Rate

Main Reasons for Probable Increase in Electricity Rate

Armenia did not refuse from the Russian loan for the extension of the Armenian Nuclear Power Plant (ANPP) second unit, simply because Armenia did not apply for a loan extension due to problems with its terms. as Hakob Vardanyan, RA Deputy Minister of Territorial Administration and Infrastructure, stated at the sitting of RA NA Standing Committee on Regional and Eurasian Integration held on January 12, 2021.

Reminder: 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.

Hakob Vardanyan explained: "The balance of the Russian loan together with the grant amounted to about $ 110 million. The loan term expired on December 31, 2019.

Under the terms of the loan in force, it were not possible to complete the program. The Russian side proposed to extend the term of using the loan means until the end of 2021, but all the work, which have already been commenced or will have been commenced, would not have been completed by that time. For example, the repair of a substation, a cooling tower, substations and diesel generator stations would last more than two years. Russia also provided loans to other countries under the same conditions. The amendment to our loan meant that other countries would want to make an amendment as well."

According to the Deputy Minister, the other problematic point of the terms of the loan was that at least 80% of the loan should have been used by Russian companies. "As a result of discussions with Russian partners, it was decided that we will continue working at our own expense," he said.

Referring to the issue that the ANPP will be shut down for 141 days for planned precautionary repairs in 2021, NA Committee Chair, MP Mikael Melkumyan noted that the improper use of the Russian loan led to that stoppage. "This, in turn, has led to an increase in other factors, including an increase in electricity prices by 3 AMD," he said.

In response, Hakob Vardanyan said that the shutdown of the nuclear power plant has many other reasons. "The loan program started in 2014 and it should have ended in 2019. By the middle of 2018, when the plant was shut down for planned precautionary repairs, 80% of the project had not yet been implemented. The point is that there was no experience of such work, from the very beginning, the terms and volume of work were not estimated correctly." As a result, the program was not completed on time," he said.

According to Hakob Vardanyan, the shutdown for 141 days is conditioned with the operations of the emergency cooling system and the reactor body firing. "The initial project of the loan agreement did not envisage the firing of the reactor body, it arose within the framework of studies," he said.

The Deputy Minister noted that the long shutdown of the nuclear power plant will have a negative impact on the tariff. According to him, the tariff is also affected by the currency factor, the deficit of the previously accumulated system, and the other is the failure to accomplish the repair of Vorotan hydrocascade on time, which caused a damage of 6 billion AMD.

January 14, 2021 at 15:36