Yerevan // Tiny Armenia, a landlocked country with two closed borders and no commercial petroleum reserves, faces a huge problem securing energy.
Its ageing nuclear reactor, which supplies 40 per cent of the republic's electricity, is due to be decommissioned in 2016; its natural gas supply from Russia is unreliable; and it has almost exhausted its hydro-electric potential.
Those, at present, are the only power and heating sources for the mountainous South Caucasus country with snowy Eurasian winters.
"The number one problem for us in Armenia is the energy problem," Armen Movsisyan, the country's energy minister, said recently.
Armenia has already survived one severe energy crisis after the collapse of the Soviet Union, of which it was once a part.
Its Metsamor nuclear plant was shut down by Soviet authorities in 1989, just 13 years after it came online, probably due to international pressure over safety concerns after the world's worst nuclear disaster at Chernobyl in Ukraine three years earlier. In that instance a catastrophic explosion left the radioactive reactor core exposed.
As with Chernobyl, the structures containing the Metsamor reactors are single-walled. All modern reactors have double-walled containment structures.
Armenia had also suffered a devastating earthquake in 1988, which raised international awareness of the location of its atomic plant, close to major seismic fault lines. Metsamor was only 75km from the epicentre of the quake in north-western Armenia, which killed 25,000 people.
But Mr Movsisyan said the decision to close both of the plant's reactors had nothing to do with that event. "It wasn't related to the earthquake," he said, without elaborating.
Regardless of the exact reasons, the reactors were restarted six and a half years later in 1995, under the watchful eyes of the International Atomic Energy Agency (IAEA) and the Armenian Nuclear Regulatory Authority, which was established in 1993, just two years after Armenia gained independence.
The power station is run by a consortium of the Russian electricity utility RAO UES and the Russian nuclear operator Rosenergoatom.
The decision to restart the decommissioned nuclear reactors, a rare occurrence anywhere, was made because Armenia simply could not do without the power.
The country lost its gas supply from Russia for more than two years after the Soviet break-up, leaving its people dependent on firewood to survive freezing winters. In short order, the young nation also lost of most of its forests.
Today, small armies of volunteers and agricultural workers in a country that exports cherries, pears and walnuts are replanting orchards and formerly wooded areas. Armenia is also looking at developing wind and geothermal power to augment its hydro-powered renewable energy sector, but that will take time.
In the medium term, said Mr Movsisyan, "our energy options are nuclear and gas".
Armenia's eastern and western borders with Azerbaijan and Turkey have been closed since 1993 due to the dispute over the breakaway enclave of Nagorno-Karabakh, so any gas must come from Russia to the north, or Iran to the south.
Those two countries respectively possess the world's largest and second-largest gas reserves, but that does not mean importing gas from either is easy.
The existing Russian gas supplies to Armenia must pass through Georgia. That nation has rocky relations with Russia, with which it briefly went to war in 2008.
The Armenian government worries that the gas flow through the poorly maintained cross-border pipeline could be cut with little warning. Consequently, it has negotiated with Tehran a second import corridor from northern Iran. A small pipeline joining the two countries opened in 2006, and another is being built.
But Iranian efforts to develop its vast gas resources have lagged behind domestic demand, with the result that Iran is a net gas importer, reliant on additional supplies from Turkmenistan.
Analysts say Iran's gas situation is unlikely to change until Tehran takes the politically unpopular step of cutting fuel subsidies and resolves its dispute with the West over its controversial nuclear programme. That casts doubt on the success of Armenian efforts to secure gas imports from its southern neighbour.
The sole remaining option for Armenia is to build a nuclear plant. It is planning to do that by 2017, under an energy policy launched in 2007 with backing from Russia, the US, the EU and the IAEA.
The EU and Turkey are growing especially nervous about the state of the existing Metsamor plant, although authorities in the capital Yerevan insist they are rigorously addressing all safety concerns.
Last year, Yerevan awarded a US$460 million (Dh1.68 billion) management contract for the nuclear development to the Australian engineering company WorleyParsons.
Last December, the Armenian energy ministry approved the formation of Metzamorenergoatom, a joint venture with Russia's nuclear contractor AtomStroyExport, to build a 1,060 megawatt plant at Metsamor that would have a 60-year service life. Construction of the $4bn project is due to start next year or the year after.
In March, the joint venture ordered equipment from Rosatom, the Russian state energy company.
With Georgian airspace closed to Russian traffic, a major issue is how to move between 12,000 and 13,000 tonnes a year of enriched uranium fuel for the plant reliably from Russia into Armenia.
Does Armenia have contingency plans to cope with any hold-ups to its crucial nuclear programme?
"The plan is that the project should not be delayed," said Mr Movsisyan.
tcarlisle@thenational.ae
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
How the UAE gratuity payment is calculated now
Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.
The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.
1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):
a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33
b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.
2. For those who have worked more than five years
c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.
Note: The maximum figure cannot exceed two years total salary figure.
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Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
The specs: 2018 Volkswagen Teramont
Price, base / as tested Dh137,000 / Dh189,950
Engine 3.6-litre V6
Gearbox Eight-speed automatic
Power 280hp @ 6,200rpm
Torque 360Nm @ 2,750rpm
Fuel economy, combined 11.7L / 100km
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Company%20profile
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How to play the stock market recovery in 2021?
If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.
Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.
Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.
Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).
Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.
Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.
By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.
As demand for energy fell, the oil and gas industry had a tough year, too.
Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.
He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”
This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”
Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.
COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
More coverage from the Future Forum
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Porsche Macan T: The Specs
Engine: 2.0-litre 4-cyl turbo
Power: 265hp from 5,000-6,500rpm
Torque: 400Nm from 1,800-4,500rpm
Transmission: 7-speed dual-clutch auto
Speed: 0-100kph in 6.2sec
Top speed: 232kph
Fuel consumption: 10.7L/100km
On sale: May or June
Price: From Dh259,900
Venue: Sharjah Cricket Stadium
Date: Sunday, November 25
Tips for newlyweds to better manage finances
All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.
Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.
Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.
Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.
Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.
Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.
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The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
Women%E2%80%99s%20T20%20World%20Cup%20Qualifier
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Company%20Profile
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World Cricket League Division 2
In Windhoek, Namibia - Top two teams qualify for the World Cup Qualifier in Zimbabwe, which starts on March 4.
UAE fixtures
Thursday February 8, v Kenya; Friday February 9, v Canada; Sunday February 11, v Nepal; Monday February 12, v Oman; Wednesday February 14, v Namibia; Thursday February 15, final
23-man shortlist for next six Hall of Fame inductees
Tony Adams, David Beckham, Dennis Bergkamp, Sol Campbell, Eric Cantona, Andrew Cole, Ashley Cole, Didier Drogba, Les Ferdinand, Rio Ferdinand, Robbie Fowler, Steven Gerrard, Roy Keane, Frank Lampard, Matt Le Tissier, Michael Owen, Peter Schmeichel, Paul Scholes, John Terry, Robin van Persie, Nemanja Vidic, Patrick Viera, Ian Wright.