Global Insight
February 8, 2008

Russia Plans to Bid on Expected Tender for New NPP in Armenia

Andrew Neff

Sergei Kiriyenko, the general director of Russia’s Rosatom state
nuclear holding company, said earlier this week that Russia plans to
bid on a tender to build a new nuclear power plant (NPP) in Armenia.
Officials in Armenia have yet to announce any tender, but Kiriyenko
said that the government plans to announce one, and "we will take
part and we have good chances of winning". Armenia has one existing
NPP at Metsamor, and the government has said it will only close the
NPP once it has alternative power generation capacity in place
(seeArmenia: 30 November 2007:). Armenia closed the NPP in 1988 due
to safety concerns after a devastating earthquake rocked the country,
but it was forced to reopen the plant in 1995 as a result of a severe
energy crisis brought on by a blockade of energy supplies from
Azerbaijan and Turkey due to the Nagorno-Karabakh conflict. Western
countries have put heavy pressure on Armenia to close Metsamor before
its operating lifespan ends in 2016 because of safety concerns and
possible design flaws in the Soviet-era facility.

Significance:Kiriyenko’s comments point to the likelihood that any
tender to build a new NPP in Armenia will favour Russian companies,
which dominate the energy sector in Armenia. Moreover, Russia is the
sole supplier of nuclear fuel to Armenia, making Rosatom a
near-certainty to win a future tender to build a replacement NPP in
Armenia.