MARCH 8 2016 (The Conway Bulletin) – The World Bank predicted that Armenia’s economy would grow at 2.5% this year, it’s lowest rate for five years. Last year, the World Bank said that Armenia’s economy grew by 3%. It said that the main problems facing Armenia were a recession in Russia and structural weaknesses in its own economy.
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(News report from Issue No. 271, published on March 11 2016)
MARCH 9 2016 (The Conway Bulletin) – Armenia, a new low-cost airline, will make its maiden flight from Yerevan to Tel Aviv on April 21, media reported quoting Robert Hovhannisyan, one of the airlines shareholders. Speculation has been growing in Armenia about whether the low-cost airline will get off the ground. It biggest shareholder is Tamaz Gaiashvili, the founder of the Georgian Airzena airline.
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(News report from Issue No. 271, published on March 11 2016)
MARCH 5 2016 (The Conway Bulletin) – Armenia’s overall electricity production was 5.2% higher in January compared to January 2015, mostly due to the sharp increase in hydropower generation.
While traditional sources of power such as thermal and nuclear increased only marginally, production from hydropower and small hydropower stations grew by 23.7%, according to Armenia’s Statistics Committee.
Small hydroelectric plants, in particular, have heavily increased their contribution to Armenia’s total power output.
Small hydropower plants are defined in Armenia as power plants that generate up to 30 MW. In Armenia there are now 173 small hydropower plants, more than twice as many as there were in 2010 and six times more than in 1991. Today, they account for around 9% of the country’s power generation.
Individual entrepreneurs, including many people linked to government officials and ministers, have driven the rise in these small hydro- power stations, building along rivers and generating power which links straight into the national grid.
But while the government has welcomed the rise in small hydro- power stations, anti-corruption campaigners have linked them to money laundering and corruption and environmentalists have said that they are damaging rivers’ eco-systems and creating eye-sores.
“Critics say the plants already in operation are sucking up most of the water in the river system, destroying traditional trout fisheries and depriving area residents of reliable access to water,” Kristine Aghalaryan said in report in the Hetq newspaper.
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(News report from Issue No. 271, published on March 11 2016)
MARCH 7 2016, TBILISI (The Conway Bulletin) — Russia’s state-owned gas company Gazprom reached an agreement with the government of Georgia to supply gas via Armenia, renewing a deal that has bound the two countries together.
The deal had been in jeopardy after negotiations over additional gas supplies to Georgia from Russia were frozen. But both the Kremlin and Tbilisi see the Armenia gas supply arrangement as a useful dialogue forum and forced it through.
After last-minute negotiations, Kakha Kaladze, Georgia’s minister of energy, confirmed a deal.
“We have reached an agreement with Gazprom, now we just have to sign it,” he told media.
The deal, Mr Kaladze said was similar to the earlier one, with Georgia receiving 10% of the total gas Gazprom sent to Armenia. Georgia, which has been transforming itself into a transit hub for the South Caucasus, had wanted cash instead of gas for the arrangement but Russia refused to budge.
The renewed deal between Georgia and Gazprom will also be a relief to Armenia, which is reliant on supplies from Russia. It has struck deals with Iran but Russia remains its most important partner.
Until the first quarter of 2016, Armenia will continue paying s discounted rate of $165/thousand cubic metres, which Gazprom cut by 12.% last September.
Armenia and Gazprom will have to negotiate a new price for gas for the rest of the year.
Earlier, on March 4, Georgia signed a deal with Azerbaijan to receive an extra 500,000 cubic metres of gas. It had been in negotiations with Azerbaijan, Iran and Russia for months to seal the deal.
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(News report from Issue No. 271, published on March 11 2016)
MARCH 11 2016 (The Conway Bulletin) – Data from Armenia has shown that small hydro power stations now generate a significant amount of the country’s power.
Of course this could be a good thing, reducing Armenia’s dependency on its aging nuclear power station. It also needs to be viewed with a degree of concern.
Many of these power stations actually do more harm than good to the environment. They are often built in fragile parts of the eco-system without much, if any, planning. They can damage and harm the environment.
And there is a whiff of corruption surrounding them or at least nepotism. Many of these small hydro-power stations are owned or linked to, members of parliament and even government.
Armenia needs to impose proper oversight on the sector, building up trust in its intentions. If it is properly regulated, small hydro-power stations could be a benefit to the environment and to ordinary Armenians. If it isn’t, it’ll be a blight on the environment and on the country’s governance reputation.
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(Editorial from Issue No. 271, published on March 11 2016)
MARCH 4 2016 (The Conway Bulletin) – Coca Cola Hellenic Bottling, the Armenian distributor of soft drinks, said it disagreed with the State Commission for Protection of Economic Competition which imposed a 50m dram ($102,000) fine on it for unfair competition last week. Coca Cola Hellenic said it will challenge the fine in court.
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(News report from Issue No. 271, published on March 11 2016)
MARCH 2 2016 (The Conway Bulletin) — Russian miner Polymetal bought the Kapan gold mine in Armenia from Canada’s Dundee Precious Metals, in a move that consolidates and expands its Armenian assets.
The deal, worth up to $50m, is Polymetal’s second acquisition in Armenia, after it bought the Lichkvaz gold mine last year for $13.2m.
Kapan, a medium-sized mine, located around 300km south of Yerevan, is surrounded by other gold reserves. Lichkvaz is 70km away from Kapan. According to the latest survey, it holds 16m tonnes of ore. Polymetal wants to make it a processing centre for its operations in Armenia.
“We believe Polymetal can transform Kapan from a low-margin asset into a capital-light profitable regional processing hub with sizable production” said Vitaly Nesis, Polymetal CEO.
Analysts agreed that the deal would bring major benefits to Polymetal’s Armenia operations.
“Polymetal bought Kapan to enable synergies with Lichkvaz. I think Polymetal will focus on developing these two mines first (before looking at others),” said Anna Mulholland, director of equity research for European metals at Deutsche Bank.
Dundee will receive $10m in cash and $15m in shares from Polymetal. Dundee is also entitled to receive a 2% royalty, capped at $25m.
Kapan produced 410,000 tonnes of ore in 2015, a 2% increase compared to 2014. Last year, Dundee said production at Kapan could rise to around 1m tonnes per year.
Polymetal’s operations are mostly concentrated in Russia. In May 2014, Polymetal bought the Kyzyl gold mine in Kazakhstan from Timur Kulibayev, son-in-law of President Nursultan Nazarbayev for $619m.
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(News report from Issue No. 270, published on March 4 2016)
MARCH 2 2016 (The Conway Bulletin) – Armenia, a new low cost airline, will start flying in April, pending the approval of Armenia’s aviation committee. The owners of Georgia’s low cost airline Georgian Airways, Tamaz Gaiashvili and Robert Oganesian, own 49% of Armenia, while Ashot Torosyan, an Armenian businessman, owns 51% of the company. Armenia’s aviation sector has been in flux since Air Armenia was declared bankrupt in 2014.
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(News report from Issue No. 270, published on March 4 2016)
FEB. 26 2016 (The Conway Bulletin) – An Armenian government agency slapped a 50m dram ($102,000) fine on Coca Cola Hellenic Bottling Armenia for unfair competition. Armenia’s State Commission for Protection of Economic Competition found Coca Cola Hellenic guilty of “creating barriers to entry of competitors into the market.”
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(News report from Issue No. 270, published on March 4 2016)
FEB. 26 2016 (The Conway Bulletin) – Stall owners in Yerevan’s largest clothing market scuffled with police during a protest against what they say are unfair rents they are having to pay in worsening economic conditions.
Armenia is prone to street demonstrations which can often be drawn out and rattle governments. Last year protests over a proposed increase in electricity prices lasted weeks and eventually forced the government to backtrack.
And, just like its neighbours, Armenia’s economy has been worsening over the past 18 months. Remittances have fallen, GDP growth is low and shopkeepers have said that trade has collapsed.
Now frayed nerves appear to be morphing into street demonstrations once again.
Official data has shown that trade in Armenia in 2015 was down by nearly 60% on the previous year, media reported. Stall owners at the Malatia market on the western edge of the city appear to agree. Hundreds stopped work to join the protest that blocked a road.
“We are not slaves. Enough is enough,” RFE/RL quoted one stall owner as saying.
They wanted the rent on the stalls to be lowered by 30%, a figure that the market’s owner has said was impossible to hit.
The demonstration’s leaders have said that they will not pay rent in March unless the price is dropped, setting the scene for another show- down next month.
Police detained three people at the demonstration.
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(News report from Issue No. 270, published on March 4 2016)
