REGULATOR POSTPONES DISCUSSION OF ELECTRIC NETWORKS OF ARMENIA INVESTMENTS FOR 2015
YEREVAN, February 25. /ARKA/. Armenia’s public services regulatory
commission postponed approval of the investment program of Electric
Networks of Armenia for 2015 at its meeting on Wednesday.
The general director of the company Yevgeniy Bibin asked for
postponement due to difficulties in attracting loans and regaining
financial stability. Bibin said the company has operated in loss
since 2012 and the total losses amounted to 10 billion 676 million
drams by the end of 2014.
He also said a working group is set up to look into the situation
and elaborate a document that will be submitted for signing at the
coming meeting of Armenia’s president Serzh Sargsyan and chairman of
Inter RAO board Boris Kovalchuk.
The document will enable the company building clear relations with
the banking sector, getting its loans restructured and attracting
new loan funds under soft terms, Bibin said.
In this respect, the general director asked the commission to put off
the consideration of the issue at least for one month and a half. This
will allow the company making more balanced decisions and discussing
its investment programs in a correct way, Bibin said.
“We are well aware that it will be difficult for us to implement all
the investments planned under the investment program, but now we face
a much more serious problem to be solved, that is to attract loan
funds. Unfortunately, the rates offered to us by the banking sector
for dram loans exceed 20%, and they make us suffer losses under these
circumstances,” Bibin said. The company cannot afford heavier debts
than it has now, he added.
The general director stressed the company will continue making
investments under the 2014 program that envisages another 1 billion
drams to be invested during 2015.
Head of the PSRC Robert Nazaryan said the company’s investment program
was submitted back in autumn 2014 and the Electric Networks could
have notified about the need for postponement before.
Yet, approval of the program is not an end itself, but is to help
increase the standard of the service and safety level. Hence, the
commission meets the company halfway and put off the discussion until
April 1, Nazaryan said.
As per PSRC’s draft decision, the company’s investments for 2015 will
amount to 8.4 billion drams (without VAT).
According to the ministry of energy, electric Networks of Armenia owe
$220 million to banks. The main reasons are higher actual losses in
the network, reduced energy generation at hydro power plants, and etc.
As a result, the current tariffs do not reflect the actual costs of
the company. The ministry carried out studies and developed a loss
reduction strategy to help the company reduce losses by 2% in the
next two years.
The Electrical Networks of Armenia is a 100% subsidiary of Russian
INTER RAO UES. Its main function is distribution of electricity to
all local consumers. ($ 1 – 478.63 drams). -0–