Fuel deal reached

30 May 2001

Under a deal signed by Armenian energy minister Karen Galustyan during a visit to Moscow, Russia will supply Armenia 2 with a new batch of fuel on condition that Armenia guarantees staged repayment of its fuel debts (see NEI March 2001, p9). Russia, the sole fuel supplier to the Armenia 2 reactor, had been threatening to stop exporting fuel to Armenia over debts totalling $16 million for earlier supplies. Fines and penalties on fuel credit totalling $3.5 million, accumulated since 1999, are not included in the main debt repayment.

The new fuel is to be delivered early in July. Russian legislation exempts CIS countries from VAT on exported goods and services after 1 July 2001, saving Armenia $2.5 million.

Armenia is under pressure from the European Union to mothball Armenia 2, which produces over 40% of the country’s total electricity. Foreign minister Vartan Oskanyan told the European Commission that the country will only consider shutting it down after the country’s electricity needs satisfied. This announcement reverses an earlier agreement to close down the plant after the EU and other donors had made money available for safety programmes.

The general director of the plant, Suren Azatyan, said that he is expecting E11 million ($9.5 million) from the EU this year to improve safety levels. Earlier this month the EU announced that it was prepared to provide a total of E10 million a year.

The US DoE agreed to provide $5 million in aid. Washington has so far contributed $18 million towards safety upgrades at the plant.

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