Loans Are Borrowed to Pay Debts Instead of Improving the Energy Industry
23.02.2016
14:00
The Armenian Government borrows a loan of USD 30 million to pay short-term loans of state electricity stations rather than to improve the energy industry in the country. As a result, the payment period is prolonged, with the Government increasing its gross debt.

Economy expert Artak Manukyan and lawmaker Aram Manukyan from the Armenian National Congress shared thoughts on the approval of a new loan for Armenia.

At February 19 session of the Government, the executive branch of Armenia has approved a program “On financial recovery of generating companies”, under the program, Armenia is borrowing funds from the World Bank to repay the loans of the Electric Networks of Armenia. The loan will be provided for 30 years on preferential terms within the next 14 years, and then Armenia will be paying a 1.5% p.a. interest rate.

Parallel to the loan involvement process the minister's declaration on that it will not affect energy tariffs, Aram Manukyan assessed as blackmail. "This is blackmail, and if the members of the parliament do not vote in favor of taking the loan, the energy tariffs will rise again", he said, adding that as a result of permanent loans Armenia's foreign debt exceeds 50% of GDP.

The economist Artak Manukyan considers  that the corroboration of Energy and Natural Resources Ministry on loan involvement is "absurd". "The ministry says that since the money for stations has not been paid on time, they are involved in the problems facing commercial banks loans. If so, then the state should borrow low interest rate and long-term loans and close the deficit", he said, adding that the statement of the Ministry is not clear.

Arshaluys Mghdesyan

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