The Armenian government on March 27 sought to squash speculation that it could drop a project to expand its nuclear power plant, but admitted it is having trouble raising the cash.
Energy and Natural Resources Minister Armen Movsisyan rejected recent reports questioning Yerevan's commitment to the project to replace the Soviet-era Metsamor plant. However, he acknowledged that Yerevan is struggling to find the estimated $5bn needed to build a new facility, despite hopes of Russian finance.
The official told journalists that due to conditions on international markets, together with "some geopolitical developments", Yerevan has not so far been able to raise the funds to start construction of a new unit. However, the finance ministry has been instructed to accelerate work to secure an intergovernmental loan from Russia for the project, Arka reports.
Yerevan is already working with Russia to extend the life of the existing units at the power plant and is hopeful of receiving further support following President Serzh Sargsyan's decision to enter the Russian-led Customs Union in September 2013.
Metsamor, which is 36km from Yerevan, was built in the 1970s, but closed after the devastating 1988 earthquake raised fears about the security of the plant. However, one of the two reactors was restarted in 1995, as sanctions imposed by neighbours Azerbaijan and Turkey forced Yerevan to find new power sources.
Two years ago, the government decided to extend the service life of Metsamor, which provides around 40% of Armenia's electricity, for ten years, which would keep the plant in operation until 2026. The decision provoked safety concerns elsewhere in the Caucasus region. Both Armenian environmental groups and Armenia's neighbours have called for Metsamor to be shut down altogether.
Preliminary work on extending the life of the reactor is currently underway, and is due to be completed by September 2016, the reactor's expiry date. The Metsamor management company is expected to sign an agreement with Russia's Rosatomservice on the project in 2014.
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