On June 8, an agreement on purchase-and-sale and transfer of the property rights of the Vorotan Cascade of HPPs CJSC was signed in the Government of Armenia.
According to the Government press-office, Minister of Energy and Natural Resources of Armenia Yervand Zakharyan, Director General of the Vorotan Cascade of HPPs Sasun Khachatryan as well as the authorized representative of Contour Global Hydro Cascade and ContourGlobal Terra Holdings - Executive Officer of CG Solutions Global Holding Company Joseph Brandt.
Earlier, on April 22, the Government adopted a decision to sell the Company ContourGlobal. Earlier, ArmInfo reported that on January 29, ContourGlobal and the Government of Armenia announced that they have signed an agreement for ContourGlobal to purchase and modernize the Vorotan Hydro Cascade, a series of three hydroelectric power plants totaling 405 MW on the Vorotan River in southern Armenia, for a purchase price of $180 million USD. ContourGlobal pledges to invest $70 million over the next six years in a refurbishment program to modernize the plants and improve their operational performance, safety, reliability, and efficiency. The Public Services Regulatory Commission has already approved the tariff plan for the consistent exploitation of the Vorotan Cascade for the coming 25 years by Contour Global Hydro Cascade.
To issue the license (and recognize CountourGlobal as the owner) a closure act is required. However, a provision in the sales contact claims that each of the parties has a right to terminate the deal if it is not completed within 75 calendar days. The Government of Armenia decided not to display extra formalities in the interests of the investor, and consequently, in the interest of the country's economy. In addition, the Law On the National Water Program says a number of water reservoirs of the Vorotan Cascade of HPPs are not subject to privatization. There were also some other technical issues. Now, all the problems have been settled.
Vorotan Cascade of HPPs consists of three hydro-power plants with a total capacity of 404MW. The Cascade operates year-round thanks to its two reservoirs and helps regulating the frequencies of power exchange from Iran to Armenia and the vice versa. The designed capacity of the Cascade is 1.16 bln kWh electricity annually. Vorotan Cascade of HPPs CJSC was 100% state company under jurisdiction of the Ministry of Energy and Natural Resources of Armenia before the latest deal. The Vorotan Hydro Cascade is one of the largest and most flexible power generating facilities in Armenia and the Caucasus. It needs modernization and this acquisition represents the largest single U.S. private investment in Armenia's history and the first U.S. investment in Armenia's energy sector. ContourGlobal is a New York based international power-generation company with approximately 3,500 MW in operations or under construction in 17 countries and on four continents. ContourGlobal's 1,650 employees manage, own and operate a portfolio of 33 power plants utilizing a wide range of fuel types and technologies including renewable energy production based upon Hydro, wind, solar and biomass, as well as an extensive fleet of conventionally powered thermal power plants. In the wider Eastern Europe area, ContourGlobal currently owns and operates approximately 1100 MW of power generation businesses in Bulgaria, Ukraine, Romania, and Poland.