USAID Statement on Reports of a Transfer in Ownership of Armenia’s Energy Distribution Company

A1+
19-07-2005

The United States Agency for International Development (USAID) is
concerned by reports that a transfer of the beneficial (or economic)
ownership of Armenia’s energy distribution company (Electric Networks
of Armenia, or ENA) from its currently licensed owner (Midland
Resources Holding) may have taken place. If these reports are correct,
this transfer occurred without following important Armenian government
regulations which exist to protect Armenian consumers. As we wait for
this situation to be clarified, USAID is reviewing its assistance
portfolio to determine whether the success of some of its ongoing
or planned projects would be undermined by any revised ENA ownership
arrangement, or by a lack of due process in changing that ownership
arrangement.

USAID’s concern at this situation is particularly acute inasmuch as
we have collaborated closely with the Government of Armenia over the
years to establish procedures and processes to ensure the transparency,
governance, and performance of Armenia’s public utilities. Armenia’s
Public Sector Regulatory Commission, established in part with such
USAID assistance, is intended to provide approvals of the sale or
transfer of assets such as ENA, in part to guard against the potential
negative effects that vertical integration in the energy sector might
have on energy consumers in Armenia.