CENN – JUly 27, 2005 Daily Digest
Table of Contents:1. Visit to Armenia2. Constriction Project
of Iran-Armenia Gas Pipeline is Main Component for Providing Armenia’s
Energy Security3. Banks – Participants of Renewable Energy
Development Program to be Announced in Late Autumn4. Low Quality
of Service Hinders Tourism Development in Armenia5. Lost Riches of
the Mtkvari – Legend or Reality?6. Akhurian Water Reservoir
Pollution Rises Concerns7. EBRD Provides $3M Finance to Armenian
Bank8. Open Science Conference: Global Change in Mountain Regions
1. Visit to Armenia

On July 22, 2005 employees of Bolnisi Public Environmental Informational
Center visited their Armenian colleagues. In the office of Akhtala
Center in the framework of the project “Local Capacity and Regional
Confidence Building and Networking for Promotion of Integrated Water
Management in the South Caucasus Countries (watersheds of the Debed and
Khrami Rivers)” was held meeting. Besides the employees of Bolnisi and
Akhtala Centers the meeting attended representatives of NGO “Ecological
survival” (Yerevan), Foundation Eurasia, representatives of local and
regional governmental structures, also invited specialists.

The main objectives of the meeting were:

1. disforestation and ecological problems connected
with this process;

2. river pollution with industrial wastes

Employee of Alaverdi enterprise industrial complex mentioned that in
their complex was installed the new system for water pumping as a result
of this pollution of river Debed was stopped. For current time the main
ecological problem is surge of atmosphere by sulphuric gas.

Georgian participants familiarized the participants of the meeting with
the process privatization of “Madneuli” Ltd. It was mentioned that CENN
carries an active negotiations with the ministry of Economical
Development and Environmental Protection and Natural Resources, also
with the heads of “Madneuli” Ltd. The aim of CENN activity is to
introduce the environmental issues in privatization terms.

Such meetings that are aiming the exchange of information and
experience will be held in future too.

Prepared by CENN

Public Environmental Informational Center of Bolnisi 2.
CONSTRUCTION PROJECT OF IRAN-ARMENIA GAS PIPELINE IS MAIN COMPONENT FOR
PROVIDING ARMENIA’s ENERGY SECURITY Source: ARMINFO, July 19, 2005 The
construction project of Iran-Armenia gas pipeline is the main component
for Armenia’s energy security, Armenia’s deputy energy minister Areg
Galstyan stated at today’s seminar on “Armenia’s energy security”. In
his words, this project has been involved into Armenia’s energy
development strategy till 2025 ratified recently by country’s
government. Galstyan noted that active construction works are being
continued at present at the first section from Meghri to Kajaran. He
assured that the project will be realized completely in late 2006. Two
agreements were signed between the Yerevan TPS and Iranian national
company on gas export within the framework of Iranian petroleum and gas
minister Bizhan Zangane to Yerevan on May 13-14, 2004. The first
concerned the direct purchasing of the Iranian gas, the second – the
payment of Iranian “pale blue fuel” with supplies of Armenian electric
power from the Yerevan TPS – 3 kw-hour per one cubic meter of gas. These
documents determine that the program will start from January 1, 2007.
Later on, next two agreements were signed during a September visit of
Iranian president Mohammad Khattami to Armenia. One of them concerned
the allotment of $30 mln by the Iranian Bank of reconstruction and
export for the construction of the Meghri-Kajaran first section of the
gas pipeline. An agreement between “High-voltage network” CJSC and
Iranian “Sanir” company on the construction of 42-km gas pipeline
section in Armenia’s territory was signed on the base of this document.
The Iranian party, in its turn, undertook to construct a 110 km pipeline
section from Tavriz to Meghri. “However, the realization of this part of
the project will not allow to fulfill the terms of the contract as the
Iranian party undertook to provide Armenia with no less than 1 bln cubic
meter of gas, which the capacities of the first section do not allow,
Simonyan noted adding that is why it is necessary to continue the gas
pipeline construction on two directions – 55.4 km Kajaran-Sisian and
99.7 km Jermuk-Ararat. At present, construction works on the first
section in direction of Meghri-Kajaran in Armenia and Tavriz-Nordus in
Iran have been started. “Sanir” company – a general contractor of the
project, conducted a tender and signed an agreement with a subcontracted
Iranian company. Specialists of “ArmRosgasprom” CJSC participate at the
gas pipeline construction in Armenia’s territory, Simonyan noted. 3.
BANKS – PARTICIPANTS OF RENEWABLE ENERGY DEVELOPMENT PROGRAM TO BE
AMMOUNCED IN LATE AUTUMN

Source: NOYAN TAPAN, July 22, 2005

Staring late 2005, the KFW Bank (Germany) will implement in Armenia a
program on renewable energy development to be financed by the German
government. The program envisages credits for the operating, half
completed and new hydroelectric power stations. According to the
Armenian representative of KFW Karapet Gevorgian, the program advisors
will arrive in Armenia in November to develop jointly with the Central
Bank of Armenia (CBA) the criteria for choosing banks – participants of
the program and organize the competition of banks. K. Gevorgian said
that KFW Bank will allocate a total of 7.5 mln euros for the purpose of
providing long-term credits for small hydro power stations. Out of the
indicated sum, 6 mln euros will be given as a concessional loan
(carrying a 0.75% interest rate and repayable over 40 years), and 1.5
mln euros – as a grant. With the aim of implementing the program, the
German-Armenian Fund-2 will be set up to re-credit the selected
banks-participants with these resources. K. Gevorgian assured that the
repayment terms of the loans provided within the framework of the
program will be longer and their interest rates – lower compared with
those of loans given to other spheres. The hydro power station together
with its infrastructures, as well as other property of the owner may be
put in pledge. However, in order to get a loan, the recipient’s
investment must make up at least 30% of the amount required for
restoration. According to K. Gevorgian, as it is a new crediting sphere
for Armenian banks, initially they will work with the operating hydro
power stations that have guaranteed cash flows.

4. LOW QUALITY OF SERVICES HINDERS TOURISM DEVELOPMENT IN
ARMENIA

Source: NOYAN TAPAN, July 22, 2005

The development of tourism in Armenia is mainly hindered by a low
quality of services. According to the rector of the Armenian Institute
of Tourism Robert Minasian, low-quality services are conditioned by the
fact that most employees of the sphere lack the necessary special
education. In his opinion, in order to solve this problem, the
government should establish definite rules to be applied in the tourism
sphere and supervise their fulfilment. R. Minasian said that the
tourism-related legislation field is not regulated. The current law on
tourism has been in effect since 1993 and, according to the rector, is
of a declarative character. According to R. Minasian, if not enough
funds are allocated for tourism development from the state budget, the
tourist rent and tourist tax must be introduced, which will allow to
obtain additional resources to be used for the formation of
infrastructures. It was also noted that adventure and medical tourism
have prospects for development in the country.

5. Lost Riches of the Mtkvari – Legend or Reality?

Source: “24 Saati”(“24 Hours”), July 25, 2005

Certainly, the banks of the River Mtkvari are not the same today. The
ecological conditions in some places are really shocking. I make my way
through garbage, empty bottles and dirty cellophane bags. And what an
amazing paradox: I look up and see beautiful green trees and bushes, the
light blue Tbilisi sky with running white and smoke-colored clouds. A
fish is splashing in the flooded Mtkvari water… the contrast of two
parallel realities is striking.

In the shadow of a young almond-tree sits an elderly fisherman with a
younger friend. They are watching a 16-year-old boy who is standing in
the water, his eyes fixed on his fishing rod. I come nearer and sit down
on a piece of foam plastic. The’ elderly man, whose name is Tristan, has
been a professional fisherman for more than forty years. His friend
Igor, who is about 40 years old, is also a very experienced fisherman.
Fishing has a specific sense for them (sometimes strange for us). So
they start a conversation. These men are very educated in what they do,
and they immediately give me plenty information and literature on the
theme. I am greatly interested in the burning topic of poachers.
According to the law, the total weight of fish caught shouldn’t exceed 5
kilograms per day. These people catch 100 and sometimes even 200 kg. But
the worst thing is that they kill fish with electric current.

They were first noticed in 1988 -people on boats, killing fish with 220
volts from a transformer. This doesn’t just kill the caviar, but
sometimes eating such fish poses serious health risks. And an
interesting point: poachers were given counterfeit licenses by GruzFish
in the early 1990s. Now the police catch these people, who mainly work
in the upper Mtkvari: Mtskheta, ‘Zahes’, Rustavi boundaries, killing all
varieties of fish.

Tristan says, `Such illegal fishing has led to the birth of second and
third category fish, which is more adapted to the dangerous life in
Mtkvari River, eating very valuable and useful caviar of such fish as,
mountain barbel, zanthe, etc. These fish breeds have almost
disappeared’.

As we can see, Georgia’s ecology, professional, sportsmen and amateur
fishermen, and all Tbilisi residents suffer from this fact. As L.
Sabaneev mentions in his work, `Fish suffer greatly from the
interference of man and industry’. We already can see the facts.
Specialists state that in 10 years Georgian ecological river system will
pass the point of no return. Certainly, it’s not only the poachers who
are to blame. In the 1980s, the Soviets established the `Shamkhori Hes’
on Azerbaijan territory, which causes serious harm to Mtkvari fish,
preventing migration, which is the main way by which these fish live and
spawn.

The spawning starts early in June, and the actions of the poachers are
even more dangerous during this period. The fishing season runs from
September to May. In summer, when the caviar starts growing, fishermen
can only fish with rods and other simple instruments.

I was very curious to know if the fish caught in Mtkvari was safe to
eat. Igor told me, ‘Tristan can confirm that in the 40 years he has been
working he has never had any problems with the fish he has caught. You
risk poisoning from fish only if you eat caviar during the spawning. It
is certain that the pollution and toxic substances in the river upsets
the natural balance, but it is very important for everyone to abandon
the idea that Mtkvari fish are dangerous because they feeds on sewerage
faults. People are misled when they are told that there is no Mtkvari
fish in restaurant menus. There certainly is – and what’s more, it is
completely safe to eat’.

The average price of Mtkvari fish varies from 5 to 10 GEL per kilogram.
An ordinary riverside fisherman catches at best about five kilograms of
fish, which is the legally permissible standard to maintain a positive
ecological balance. They conscientiously sell their catch at specially
made markets at the quay, where there are peculiar unwritten rules for
the fishermen. But let us imagine how much money a man using electric
current, catching from 50 to 200 kg per night. By catching about 100 kg,
they damage the river balance two and even three times more by using
electric current. This doesn’t happen anywhere else in the world – and
this is just wild!’ says Igor. In 2003, some ecological delegations and
TIbilisi Municipality became engaged in this issue and the progress
became more and more noticeable. However, this didn’t last for long, and
the professional fishermen often still see poachers at night.

So how is it possible to identify them? Fish poachers `work’ mainly in
the darkness of the night. They are usually two men in a boat. One of
them rows and other holds a net that is connected to an electric
transformer with 220 Volts. He has a lamp fixed on his head like miners
use. He switches it on very rarely – just at certain times when they are
ready to catch. It is not very difficult to spot or catch these
criminals, and the patrol police do so. But there is another problem to
solve: holding them responsible before the law.

Igor and Tristan on behalf of all their friends-professional and amateur
fishermen state: We see them (the poachers) very often. Sometimes they
even wave to us. But we don’t return their greeting. They’re harming the
river that feeds most of us. We can understand them – they are just
trying to earn money to keep their families from starving, but it is not
an honest way. It kills the fish and river wildlife, including many fish
that are already in the Red Book. All of us – Tbilisi residents,
representatives of the government police, ecological movements and
certainly fishermen, must struggle to restore the ecological balance and
the previous bounty of really unique fish, which by right belong to the
Mtkvari’.

6. AKHURIAN WATER RESERVOIR POLLUTION RAISES CONCERNS

Source: ARMENPRESS, July 25, 2005

Findings of an extensive study of Armenia’s biggest Akhurian
water-reservoir in the north-eastern province of Shirak close to
Turkish-Armenian border indicate that though the water from the
reservoir is still fit for irrigation, the level of its pollution (the
water contains a number of heavy metals) makes consumption of its water
hazardous.

These findings were compiled in a book that was presented in Gyumri. It
was published with the assistance of the World Council of Churches,
Swiss EFO and other organizations. The three-year study was conducted by
Armenian GeoFon organization. The reservoir’s capacity is 525 million
cubic meters of water. It irrigates around 104,000

hectares of agricultural lands.

According to Levon Martirosian, who coordinated the studies, the
reservoir water is likely to be polluted by a Turkish leather factory
across the border that pours out its waste waters into Akhurian River
that feeds the reservoir. He says to prevent further pollution

extensive studies should be conducted also in the Turkish section, as
the reservoir is used equally by Armenia and Turkey. Martirosian said
their effort to get a permission of the Turkish authorities t conduct
such studies was rejected.

7. EBRD PROVIDES $3M FINANCE TO ARMENIAN BANK

Source: Press Release – European Bank for Reconstruction and
Development, July 25, 2005

The European Bank for Reconstruction and Development is providing a $3
million financing to the Agricultural Cooperative Bank of Armenia
(ACBA). The loan is the first in Armenia of a new type of EBRD
instrument, the Medium-Sized Loan Co-Financing Facility (MCFF).

The MCFF is one of several instruments offered in Armenia, Azerbaijan,
Georgia, the Kyrgyz Republic, Moldova, Tajikistan and Uzbekistan, the
Bank’s seven lowest-income countries of operation, under the Early
Transition Countries (ETC) initiative. This

iitiative, launched by the EBRD in 2004, aims to stimulate market
activity by using a streamlined approach to financing more and smaller
projects, mobilizing more investment, and encouraging economic reform.
The initiative is part of an international effort to address poverty in
these members of the Commonwealth of Independent States (the former
Soviet Union). The Bank will accept higher risk in the projects it
finances in the ETCs, while still respecting the principles of sound
banking.

The MCFF is available to banks with strong credit policies and
procedures, but which are limited in the loans they can provide to local
corporate clients. It allows ACBA to co-finance, with the EBRD, bigger
sub-loans to its clients and share with the EBRD any risks involved with
such lending. While ACBA’s internal credit procedures have until now
limited any credit exposure per single borrower to a maximum of
$180,000, with the help of the MCFF it will be able to offer its most
trusted and financially viable clients from $400,000 to $1 million.

ACBA was created in 1996 to help farmers find finance after Armenia
privatised state-held land. It was modelled on France’s Credit Agricole.
Its structure — with collective ownership based on village cooperative
associations, and coffers swelled at the grassroots by more than 20,000
farmers’ sign-up fees of $10 – is unique in the former Soviet space.
ACBA has since developed business outside agriculture in almost all
areas of the economy. The EBRD is delighted to make this co-financing
available to ACBA, which is now Armenia’s largest bank by
capitalisation, and generates solid profits, said Michael Weinstein,
head of the EBRD’s Armenia Resident Office.

8. Open Science Conference: Global Change in Mountain Regions

Open Science Conference: Global Change in Mountain Regions will be held
on October 2-6, 2005 in Perth, Scotland, UK.

Outcomes:

1. communication of new results between scientists and researchers
working in the mountains of both industrialized and developing countries
around the world

2. a framework for long-term research on global change that can be
implemented in Mountain Biosphere Reserves and other mountain locations
in both industrialized and developing countries.

Format:

· Plenary Presentation

· Concurrent Sessions for contributed papers (chosen from 310
submissions)

· Poster session and reception

· Synthesis: a global change strategy for mountain regions

· Fieldtrip (October 2)

Additional information available at:

CENN INFO
Caucasus Environmental NGO Network (CENN)

Tel: ++995 32 75 19 03/04
Fax: ++995 32 75 19 05
E-mail: info@cenn.org
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