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Russian Utility ‘Rescued Armenian Nuclear Plant’

By Atom Markarian

The Armenian government’s decision in 2003 to grant Russia financial control over the nuclear power station at Metsamor has proved to be a blessing for the Soviet-built facility, its chief executive said on Tuesday.

Gagik Markosian argued that the plant has balanced its books and experienced no refueling difficulties for the first time since the 1995 reactivation of one of its two reactors.

“Last year was the first time that we had no such problem,” he told RFE/RL in an interview. “Fuel was supplied without delays and that is why we produced a record-high volume of energy.”

According to official statistics, Metsamor generated 2 billion kilowatt/hours of electricity or almost 40 percent of Armenia’s aggregate power output in 2004.

The plant ran up $100 million in debts and was unable to pay for fresh Russian nuclear fuel deliveries until it was placed under the financial management of Russia’s state-run power monopoly, RAO Unified Energy Systems (UES). UES was also granted the ownership of a cascade of hydro-electric power plants near Yerevan in return for writing off Metsamor’s $40 million debt to Russian fuel suppliers.

The remaining $60 million, owed to the state budget, was forgiven by the Armenian government. In addition, it diverted last December $27 million in proceeds from the privatization of Armenia’s biggest metallurgical complex to Metsamor in payment for equally big sums owed to the plant by Hayenergo, the now liquidated state-run power distributor.

Markosian put Metsamor’s current debt at $4.5 million. He said the plant, located 35 kilometers west of Yerevan, is now financially self-sufficient but still UES’s assistance for making 50 percent advance payments to the fuel suppliers. “That issue is solved by RAO UES,” he said.

The plant’s light-water reactor built in 1979 was last refueled in October after a two-month halt during which it underwent regular capital repairs. The reactor’s core was inspected by Czech specialists and, according to Armenian officials, found to be in good condition.

Armenia has been under pressure from the United States and especially the European Union to shut down the plant as early as possible due to its perceived insecurity. In a report released earlier this month, the EU’s executive Commission emphasized that the decommissioning of Metsamor and other Soviet-built nuclear facilities remains “a key EU objective.”

Markosian, however, repeated the Armenian government’s position that the plant is safe enough to continue to operate for years to come.

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