By Lia Avagyan
Armenian Prime Minister Nikol Pashinyan announced on June 24 that the government has finalized a plan to nationalize the country’s main power distribution company, the Electricity Networks of Armenia (ENA). “The nationalization plan for the Electricity Networks of Armenia is ready,” Pashinyan wrote on Facebook. “We will soon move into the implementation phase. The process will proceed in accordance with the laws of the Republic of Armenia.”
The announcement comes amid a sharp political standoff between the government and Russia-based Armenian billionaire Samvel Karapetyan, whose Tashir Group acquired ENA in 2015. Karapetyan has been one of the largest private investors in Armenia since independence and a longtime donor to major national projects, including infrastructure and development initiatives in both Armenia and Artsakh. He has also been among the biggest contributors to the Hayastan All-Armenian Fund.
Tensions escalated after Karapetyan publicly voiced support for the Armenian Apostolic Church and Catholicos Garegin II, amid what the Church and its supporters have described as an ongoing campaign of pressure by the Pashinyan administration. On June 17, following his statement of support, police conducted a search of Karapetyan’s Yerevan residence and detained him. A court later ordered a two-month pre-trial detention.
Controversy over the nationalization plan’s legal and economic impact
The timing of the nationalization announcement has sparked concerns that the move may be politically motivated. Economists and legal experts warn that the plan could have long-term consequences for Armenia’s investment climate, legal predictability, and international credibility.
Vache Gabrielyan, former Deputy Prime Minister and Dean of the Business and Economics College at the American University of Armenia, noted that the term “nationalization” does not exist in Armenian law and that any such move would require a new legal framework. “This is a highly complex issue, and until there is a clear draft law or policy proposal, any assessment is speculative,” Gabrielyan told CivilNet.
He emphasized that state control over strategic infrastructure may be justified in rare cases but should not be treated as a general policy. “The state is not necessarily the best manager,” Gabrielyan said, adding that ENA was privatized originally as part of structural energy sector reforms aimed at improving efficiency and regulation.
Gabrielyan also warned that nationalization could conflict with Armenia’s international obligations, especially given that ENA’s ownership structure includes entities registered in Cyprus and Russia, countries with bilateral investment protection agreements with Armenia. “There is a real risk of international arbitration if this process proceeds without clear legal justification,” he said.
Economist Haykaz Fanyan described the announcement as deeply alarming. “Launching a forced nationalization process, particularly without compensation, will severely harm investor confidence,” he wrote. Fanyan warned that such a move could signal international and domestic investors that property rights and contracts are not protected in Armenia.
Suren Parsyan, another economist, called the move “politically motivated” and said it could have destabilizing effects on the broader economy. “Politicizing strategic assets for short-term gain is unacceptable,” he said, adding that ENA cannot be blamed for electricity price hikes that occurred under Pashinyan’s administration.
“If the government had the tools or intention to lower prices, they had seven years to do so,” Parsyan noted.
Also read: Economists warn Armenia’s planned power grid nationalization threatens investment climate
Political analyst Tigran Grigoryan from Yerevan-based Regional Center for Democracy and Security argues that even if Karapetyan was acting under Russian influence, Pashinyan’s response risks undermining Armenia’s democratic credibility. “The instrumentalization of the justice system and the state apparatus for factional objectives does not strengthen sovereignty, it weakens it,” Grigoryan wrote in his op-ed for CivilNet. “By mimicking the logic of authoritarian regimes, the Armenian leadership not only deepens domestic mistrust in democratic institutions but also inadvertently validates the very narratives Russian influence campaigns seek to promote.” While ruling party members have accused Karapetyan of serving Kremlin interests, Grigoryan warns that combating hybrid threats through unconstitutional and politically selective means ultimately plays into Moscow’s hands by eroding democratic norms and amplifying polarization within Armenian society.
Context
The nationalization announcement came just one day after Karapetyan’s public criticism of the government’s treatment of the Armenian Church. His arrest and the subsequent crackdown have been widely interpreted as part of a broader confrontation between the Pashinyan administration and the Church, especially following Catholicos Garegin II’s participation in a conference in late May in Switzerland advocating for the rights of the people of Artsakh—an issue no longer on the Armenian government’s agenda.
Observers note that the rapid sequence of events—public criticism, arrest, and then the nationalization announcement—raises serious concerns about the separation of political and economic power in Armenia.
