Wednesday, Envoy Cautious About Greater U.S. Investment In Armenia • Artak Hambardzumian Armenia -- Ambassador Richard Mills speaks to journalists in Yerevan. 13Sept., 2017 It is still too early to expect a major increase in U.S. investments in Armenia despite the new Armenian government’s efforts to improve the domestic business environment, U.S. Ambassador Richard Mills said on Wednesday. Mills said that potential American investors are closely monitoring, among other things, the government’s treatment of a U.S.-based mining company which had won exclusive rights to develop a massive gold deposit in southeastern Armenia. The company, Lydian International, is facing an uncertain future following the recent dramatic change of the country’s leadership. According to official Armenian statistics, Lydian was the main source of $246 million in foreign direct investment attracted by Armenia last year. “The government’s actions to tackle the issue of corruption and ensure a level playing field are very welcome in the United States by the U.S. investment community,” Mills told RFE/RL’s Armenian service (Azatutyun.am). “But I think it’s still a little too early for new major investments to be announced or to begin here in Armenia.” “We’re getting lots of expressions of interest from the business community in the United States about the opportunities here,” he said. “But these potential investors are waiting to see whether now the government will follow up with some concrete actions. They also want to see how the investigations that have been launched into credible allegations of corruption are carried out. Are they done in a fair manner, according to the rule of law and due process?” “And they want to see how the government is treating U.S. foreign firms and even Armenian firms that are already operating here,” Mills went on. “Are they being treated fairly when there are investigations into their taxes? Is that being done in a fair manner? “They are looking at the issues around Lydian, how the government is handling those very sensitive and controversial issues. Will Lydian be treated fairly as that process unfolds?” All roads leading to the Amulsar gold deposit developed by Lydian have been blocked since June 23 by a group of residents of nearby communities protesting against gold mining operations which were due to start before the end of this year. The blockage is continuing despite repeated appeals from Prime Minister Nikol Pashinian. He said late last month that Lydian must be allowed to resume its operations pending the findings of an ad hoc government task force that will start inspecting the company soon. The working group is expected to submit its recommendations to the government later this month. The mining site located about 160 kilometers southeast of Yerevan remained blocked even after Pashinian visited it on July 6. The premier complained last week that Lydian executives did not display a “constructive” stance when he held a meeting with them and the protest leaders during the trip. He did not elaborate. The company, which is registered in the British Channel Islands but headquartered in Colorado, maintains that it had obtained its mining licenses in accordance with Armenia’s laws and government regulations. It has dismissed concerns about the environmental impact of gold mining at Amulsar, saying that it will use modern and safe technology. Lydian, which claims to have already invested more than $300 million in Amulsar, has condemned the disruption of its operations as illegal. It has not ruled out the possibility of international legal action against the Armenian state. Mills expressed hope last week that the environmental audit of Lydian will be conducted objectively and “in strict accordance with the law.” He said the U.S. government also hopes that the authorities will carry out similar inspections of other mining companies operating in Armenia. The envoy made clear on Wednesday that he believes Pashinian’s government is committed to “creating a good investment climate here.” “So looking ahead, I’m confident,” he said. Mills also reiterated that Washington is now considering increasing U.S. government assistance to Armenia. “We are looking at what is possible, including changes in levels of our funding through the USAID and other U.S. government agencies,” he said. Sudden Russian Drill In Armenian Village ‘Investigated’ • Satenik Kaghzvantsian Armenia - Russian military hardware is seen in the village of Panik, 17 July 2018. The Russian military base in Armenia on Wednesday pledged to investigate an unexpected exercise which was conducted by its soldiers in an Armenian village and caused panic among local residents. Amateur video posted on social media showed chaotic scenes in the village of Panik on Tuesday, with local resident terrified by deafening gunfire and explosions. Some of them angrily confronted the troops training very close to village houses, demanding explanations. The Russian soldiers stopped the exercise but were able to leave the area only after Armenian police and security officials alerted by the village mayor, Vartan Makeyan, arrived in Panik. It emerged afterwards that they did not fire live rounds. Makeyan said that the Russian military had not notified him by about the drill beforehand. He also complained that was held within the administrative boundaries of the local community. Panik is located very close to one of the two shooting grounds used by the Russian base headquartered in the nearby city of Gyumri, the capital of Armenia’s northwestern Shirak province. The deputy commander of the base, Alexey Polyukhovich, said that it has launched an internal inquiry into the incident. “The exercise was part of efforts to increase the combat readiness of the military base, including for achieving combat tasks set for the base,” he told reporters. “As for what went wrong, we will inform you about the results [of the inquiry.]” Polyukhovich met with the governor of Shirak, Karen Sarukhanian, earlier in the day. “He said that it was a force-majeure situation, that some order was not issued, that something was not organized, for which he apologized,” Sarukhanian said after the meeting. “An internal inquiry is underway and the guilty will definitely be held accountable.” In Yerevan, Defense Minister Davit Tonoyan discussed the incident with the commander of the base, Colonel Vladimir Yelkanov, as well as Russia’s charge d’affaires and military attaché in Armenia. Tonoyan’s spokesman, Artsrun Hovannisian, quoted Yelkanov as saying that the exercise had been planned and agreed with the Armenian authorities beforehand but that the Russian side “did not take into account the local population’s possible concerns” and wants to apologize for what happened. According to Hovannisian, Tonoyan urged the Russians to work more closely with Armenia’s Defense Ministry and local government bodies when planning such drills. They should also “pay greater attention to strengthening good-neighborly relations with the civilian population,” he was reported to say. Also, a spokesman for Prime Minister Nikol Pashinian told RFE/RL’s Armenian service (Azatutyun.am) that he has been briefed on the incident and ensuing developments. The Russian base numbers up to 5,000 troops mainly deployed along Armenia’s closed border with Turkey. It has hundreds of tanks, armored vehicles, and artillery systems as well as over a dozen MiG-29 fighter jets. Moscow has bolstered the base with helicopter gunships and other military hardware since a 2010 Russian-Armenian agreement extended its basing rights in Armenia to 2044. Armenian leaders have long said that Armenia hosts Russian troops on its territory primarily because of a perceived security threat from Turkey. From Yerevan’s perspective, the Russian military presence precludes Turkey’s direct military intervention on Azerbaijan’s side in the Nagorno-Karabakh conflict. Ex-Governors Trade Accusations Amenia - The national police chief, Alik Sargsian, argues with protesters outside the prime minister's office in Yerevan, 1Sep2011. Two former governors of Armenia’s southern Ararat province have accused each other of serious criminal offenses, triggering an investigation by law-enforcement authorities. The Investigative Committee reported on Wednesday that Alik Sargsian, who ran the region from 2000-2008, claimed last week to have been for years blackmailed by another, unnamed ex-governor. According to the committee, Sargsian said the latter threatened to disseminate compromising information about him unless he pays $60,000. In a statement, the law-enforcement body said that the ex-governor alleged for his part that in 2008 he paid Sargsian to help a young man work for the Armenian police. He claimed that Sargsian, who was the chief of the national police service at the time, accepted the bribe but did not hire the man, said the statement. The committee added that it has opened a criminal case under corresponding articles of the Armenian Criminal Code. It said the case has been transferred to another law-enforcement body, the Special Investigative Service (SIS), because it involves two former high-ranking officials. Neither man has been charged yet. Sargsian is currently a member of the Armenian parliament affiliated with the former ruling Republican Party of Armenia (HHK). It is not yet clear which of his predecessors claims to have bribed him a decade ago. Sargsian had succeeded as Ararat governor Hovik Abrahamian, who served as Armenia’s prime minister from 2014-2016. Deal Signed To Build Armenia’s First Large Solar Plant • Emil Danielyan Armenia - A newly constructed solar power plant in Talin, 7Nov2017. A Spanish renewable energy company was formally contracted on Wednesday to build Armenia’s first large solar power plant at an estimated cost of $50 million. The 55-megawatt plant will be built in Mets Masrik, a village close to the eastern coast of Lake Sevan. The landmark project will be mostly financed from a World Bank grant allocated to the Armenian government in 2015. An international tender for the project attracted bids from two dozen energy companies from around the world. A consortium of two Spanish companies, Fotowatio Renewable Ventures (FRV) and FSL Solar, was declared the winner of the government-administered tender in March. The Armenian Energy Ministry said they promised the lowest cost of electricity to be generated at the facility. It will be cheaper than power supplied by scores of small hydroelectric plants scattered around the mountainous country, the ministry said. An agreement on building and operating the Mets Masrik plant was signed in Yerevan by Energy Minister Artur Grigorian and Nicolas Fasquelle, FRV’s managing director for the Middle East and Africa. Grigorian’s press office said Fasquelle expressed confidence about successful implementation of the project. “The plant will have an approximate area of 100 hectares – the size of 150 soccer fields combined,” FRV said in a July 2 statement. “It will generate enough energy to power around 21,400 households.” The statement said that the plant called Masrik-1 is likely to be built by the end of 2020. FRV will hire 300 people for the plant’s construction, it added. “Armenia’s growing drive to boost renewable energies constitutes a decisive factor when it comes to committing to the country, since it presents numerous opportunities to carry out clean energy projects,” Fasquelle was quoted as saying. Armenia’s former government, brought down by mass protests in May, pledged to significantly increase the share of hydropower and other renewables in domestic electricity production. Speaking in January, then Energy Minister Ashot Manukian said the government objective is to ensure that renewable sources meet at least half of Armenia’s energy needs within the next few years. One of Manukian’s deputies, Hayk Harutiunian, said in early April that solar energy should account for at least 20 percent of Armenian electricity output by 2030. It is not yet clear whether the new government stands by those ambitious targets. Prime Minister Nikol Pashinian discussed the Mets Masrik and other renewable energy projects at a meeting with senior government officials held on Tuesday. According to the National Statistical Service (NSS), hydroelectric plants accounted for about 30 percent of electricity generated in the country last year. By comparison, thermal power plants using natural gas had a 37 percent share in the total. Virtually all of the remaining 33.7 percent of energy was generated by the Metsamor nuclear power station. Press Review “Zhamanak” says one good thing about Prime Minister Nikol Pashinian’s criticism of the European Union is that he stressed the need for the EU to “speak frankly” about its relations with Armenia. The paper is confident that Pashinian’s comments will not damage those relations. “The health of the EU-Armenia relationship requires us to start from bitter truths,” it says. “Haykakan Zhamanak” also comments on the controversy and, in particular, EU Ambassador Piotr Switalski’s statements to the effect that the new authorities in Yerevan must come up with “very concrete ideas” before demanding greater financial assistance from the EU. “In Switalski’s words, the EU message is that there is no change in [Armenian] policy towards the EU and that raises the legitimate question of why the EU would change its policy towards Armenia,” writes the paper linked to Pashinian. “The ambassador’s approach seems to contain certain calls for a change of Armenian foreign policy vectors which may be justified from the European standpoint but is unacceptable to Armenia for now.” It argues that Armenia’s foreign policy orientation is closely connected with its security needs which cannot be met by the EU. “Zhoghovurd” reports that working groups formed by Pashinian and the Armenian parliament have still not reached consensus on major amendments to the Electoral Code which are due to be enacted before the holding of fresh parliamentary elections. For the paper, the key issue is how the next Armenian parliament will be elected. “All other debates [between the two working groups] are by and large meaningless because experience has showed that a good Electoral Code is not a precondition for holding good elections in Armenia,” it says. (Tigran Avetisian) Reprinted on ANN/Armenian News with permission from RFE/RL Copyright (c) 2018 Radio Free Europe / Radio Liberty, Inc. 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org