SLOVAKIA LAUNCHES PROGRAMS ON CONSTRUCTION OF 3 HYDROPOWER PLANTS IN ARMENIA WITH CREDITS OF 10 MILLION EUROS
Noyan Tapan
Au g 6, 2008
YEREVAN, AUGUST 6, NOYAN TAPAN. Slovakian banks started providing
export credits of a total of 30 million euros for construction
of hydropower plants in Armenia. Construction of 3 hydropower
plants with credits of a total of 10 million euros has already been
launched. Other programs are being discussed. The head of the Armenian
community of Slovakia, chairman of the Forum of Armenian Unions in
Europe, businessman Ashot Grigorian announced this at the meeting of
3 representatives of Slovakian companies and 12 representatives of
Armenian companies engaged in construction of hydropower plants. The
meeting was organized by Yerevan Chamber of Commerce and Industry and
"Noyan Tapan" Media Union’s Business Information and Advice Unit.
A. Grigorian said that VUJE company (Slovakia) has constructed 2
nuclear power plants, has a long experience of cooperation with the
Armenian Nuclear Power Plant, and has been cooperating with hydropower
constructing and operating companies for 5-6 years. 2 hydropower
plants built with VUJE’s technical assistance and equipment already
operate in Armenia.
He explained that the Slovakian banks provide credits for a period
of up to 8 years (with a one-year grace period usually needed for
construction and launching of hydropower plants) and at 8.5-10%
annual interest rate, which is much lower than credits in Armenian
banking system. Crediting is done after achieving a quadripartite
agreement "Slovakian company – Armenian company – Slovakian bank –
Armenian bank". The Armenian bank must manage the repayment of the
credit received by the Armenian company from a Slovakian bank, that
is, the Armenian company makes the credit repayment to the Armenian
bank that transfers these sums to the Slovakian bank. On the other
hand, a Slovakian company’s risk in deals of Armenian and Slovakian
companies is insured by Eximbank. At that, 50% of goods to be exported
from Slovakia to Armenia must be made in the Slovak Republic, while
the other 50% – in other countries.
According to A. Grigorian, the Armenian companies engaged in
construction of hydropower plants are not inclined to purchase
expensive European equipment.
He added that in case of supply of European equipment, it will be
subject to VUJE’s guarantees, while in case of equipment made in other
countries, there will be no such guarantees. He explained that the
Slovakian banks are also ready to credit the payment of an advance
making 15% of the total amount of the credit, as well as of 6.5%
insurance – but in the form of a commercial credit.
VUJE director Milan Ferenc said that although the company’s equipment
is expensive, no high costs of servicing are required as compared
with Chinese equipment that is cheaper than European one. A. Grigorian
added that 19 out of 21 hydropower plants, which were constructed with
Chinese equipment in Albania under a state program, did not operate,
whereas another two plants worked only for a year.
He said that the crediting period for construction of hydropower plants
in Armenia may be extended by up to 10 years, including crediting of
equipment, as well as construction and design work.
During the meeting, it became clear that 4 Armenian companies have
designs for hydropower plant construction. It was mentioned that after
receiving a design, VUJE develops an offer for equipment supply –
by the best quality-price ratio. After the offer is agreed on with
the Armenian company, a credit line will be opened within a month
based on a quadripartite agreement.
M. Ferenc attached importance to the correct choice of a hydropower
plant-constructing company as there has been a case in Armenia when
the contractor company did not start its work after the equipment
had been supplied.
In the words of A. Grigorian, VTB-Armenia Bank and Unibank gave
guarantees to Armenian companies in the programs on construction
of hydropower plants with Slovakian credits. Armbusinessbank,
Ardshininvestbank, Converse Bank and Anelik Bank have also been chosen
for participation in these programs.
He said that an Armenian hydropower constructing company together
with some other guarantee-giving partner bank may enter the Slovakian
crediting programs.
A. Grigorian added that after the compeltion of 30 million-euro
crediting program, the Slovakian banks will discuss the issue of
starting the second stage.