Armenia in talks with UAE’s Masdar as ANIF dissolution derails solar plant plans

By Mark Dovich

The Armenian government is in talks with Masdar, the Emirati state-owned renewable energy company, in an effort to salvage a major solar plant deal, Armenia’s economy minister has revealed.

“I am positive and full of hope that this major investment program will still be implemented in Armenia,” Gevorg Papoyan told reporters last Friday at a press conference marking his 100th day in office. Masdar is proposing major changes to the terms of the deal and deadlines, Papoyan added, without providing any additional details.

A CivilNet inquiry to Masdar to clarify the status of the project went unanswered.

What’s the background?

In late 2021, the state-owned Armenian National Interests Fund struck a $174 million deal with Masdar to build a 200-megawatt solar power plant in Armenia’s western Aragatsotn region. Under the terms of that agreement, Masdar was set to hold an 85% stake in the project, while ANIF would take the remaining shares.

The plant was initially set to be completed by the end of last year, but as of this month, construction at the site had still not started, according to Radio Azatutyun, RFE/RL’s Armenian service. If completed, it would be Armenia’s largest.

The project’s fate was thrown into serious doubt last month, when Prime Minister Nikol Pashinyan’s cabinet dissolved ANIF amid mounting allegations of corruption and mismanagement. It transferred the scandal-ridden state investment fund’s functions to Armenia’s infrastructure ministry.

Officials had been facing growing pressure to take action since March, when the government suspended the operating license of Fly Arna, Armenia’s national airline and another one of the few projects ANIF ever invested in.

In its decision, the government cited a provision in Armenian law requiring it to strip carriers of their license if they have no aircraft. In January, Fly Arna, a joint venture between ANIF and the Emirati low-cost carrier Air Arabia, halted flights and moved all its planes to the United Arab Emirates in still-unclear circumstances.

That news left officials scrambling to explain how Fly Arna came to the brink of financial collapse after only a few years operations and after ANIF poured some $11 million of public money into the airline. Fly Arna employees told the local investigative news site Hetq in May they had not been paid since March, despite Armenian law requiring employers to give severance pay.

The International Monetary Fund raised concerns last year to the Armenian government over alleged mismanagement at ANIF, urging it to take steps to improve transparency and governance at the agency.

Armenia’s investigative authorities opened a criminal probe into ANIF in April, though as of this week, no one had been formally charged with a crime.

Also read: Democracy Watch: ANIF Dissolution Raises Questions on Investments and Governance

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