US company buys Armenian power plants in $250mn

YEREVAN: US power company ContourGlobal said it will acquire three hydroelectric power plants in Armenia in a $250 million deal.

The company said it had bought the Vorotan Hydro plants for $180 million and planned to invest an additional $70 million, making it the largest single US private investment in the Caucasus country of 3.8 million.

The deal may decrease Armenia's dependence on Russia, Yerevan's main trading partner and biggest foreign investor which is due to boost its control over the country's natural gas infrastructure.

The Vorotan Hydro Cascade complex is a series of three hydroelectric power plants totalling 405 megawatts on the Vorotan river in southern Armenia.

It accounts for about 15 percent of Armenia's power capacity and provides energy for 250,000 homes. A long-term power purchase agreement was signed on Wednesday between ContourGlobal and the Armenian government.

The agreement says the company will invest $70 million over the next six years in a refurbishment programme to modernise the plants and improve their performance and safety.

Armenia plans to join a customs union led by its former Soviet master Russia and has approved a deal under which the Russian state gas export monopoly Gazprom will take over full ownership of its subsidiary ArmRosgazprom, by acquiring the remaining 20 percent of shares from Armenia.

Russia has invested $3 billion in the country with a GDP of $9.9 billion in 2012, according to the World Bank.