Following the severe economic crisis in the early 90s, the Republic of Armenia has undertaken significant policy reforms, including legal, regulatory and institutional reforms to recover from economic decline, undertake the transition from planned to a market economy and overcome the obstacles created due to its unfavourable geopolitical conditions and lack of natural resources.

Armenia has limited fossil fuel and coal reserves, and no to very little and hard to extract confirmed oil or natural gas reserves. The energy system of the country is highly dependent on electricity generation. Electrical energy is generated by the Armenian Nuclear Power Plant, Yerevan TPP CJSC, Hrazdan Energy Company, Vorotan HPP Cascade, and Sevan-Hrazdan Cascade, as well as many smaller entities holding licences for the generation of energy through renewable energy plants (mostly hydro). 

Currently, Armenia can meet only around 35 percent of the current demand for energy with its domestic resources (Armenia imports fuel for thermal power plants, and the fuel for the nuclear power plant). Therefore, the development of renewable energy resources is of critical importance for the energy security of the country. Hydropower generation was the main driving force in solving the problem during the last 20 years. In the meantime, radical abatement of the price of solar (PV) technologies nowadays and respective increase of capital investment is likely to create a level playing field by solving energy sufficiency problem by the development of solar (PV) technologies in Armenia. Wind and geothermal energy generation is another area of development of renewables, and there are already some projects implemented or in the phase of implementation also in these areas.

The Law of the Republic of Armenia on Energy is the primary legal act regulating the Energy Sector. The law was amended thoroughly recently (effective since July 2018), which was mainly aimed at fostering the diversification of the sector. The amendment indicated new entities, who would be the participants on the energy market. Based on the law, the Energy Market will consist of entities who are licensed for energy (power) generation, the supply of energy, wholesale sale and purchase of energy, the transmission of energy; distribution of energy, operation of the energy system; operation of the energy market; and consumers, including qualified consumers. Further liberalisation of the energy market is foreseen within the regulations of the Eurasian Economic Union. Currently, the energy sector consists of an investor-owned entity carrying out the distribution of energy, a state-owned entity carrying out the transmission of energy, as well as state-owned entities that provide related services to the market. The Public Services Regulatory Commission of RA is the main regulatory body in the field: they grant licenses and oversee the implementation, as well as has a limited capacity of dispute resolution between different players of the market.

Energy Investment Risk Assessment, a report prepared by the Energy Charter Secretariat, annually assesses various aspects of the Investment in the Energy sector of a country. Armenia’s overall risk level against the assessed areas has been evaluated as low from the first year of evaluation (first evaluation as published in 2018 and since then the risk of investment in the energy sector of Armenia has remained as low). The country profile and information on the research can be found here.

Concern Dialog law firm has provided services related to Infrastructure and Energy since the mid-2000s. Additionally, we have been pioneers in advising specialised services in Renewable Energy starting from 2017, along with the promotion of Renewable Energy in the country and development of the respective market in Armenia.

At Concern Dialog, we help our clients at all stages from the beginning to the conclusion of tհe projects, development of large and small infrastructure, energy production and any matters related thereof. We apply our experience and ability to advise our clients and satisfy their specific needs based on their role in such projects.

At all stages of planning, structuring and operating of your energy projects in Armenia, Concern Dialog has the full capacity, experience and ability to provide consultancy and legal support on all aspects of your projects.

• For clients who consider engaging in Energy projects in Armenia, we provide:
  • general Consultancy on the regulations potentially applicable to the planned project, consultancy on established procedures for obtaining licenses and permits, including energy production licenses, construction and other permits,
  • consultancy on environmental regulations,
  • consultancy on the terms of exemplary agreements, other contractual restrictions and other market rules potentially applicable to the project, 
  • consultancy on land law and relevant mechanisms for acquiring land for the project,
  • consultancy on tax implications of the projects.
• For clients who are entering the Armenian market for implementation of Energy projects we provide:
  • A to Z support starting from assistance with obtaining applicable licenses and permits; undergoing Environmental expertise (including through engaging relevant experts and professionals on environmental and social impact assessments etc.), 
  • comprehensive support with indicating and determining the structure of the transaction, negotiations with state authorities and counterparts,
  • consultancy on public-private partnership legislation and its implications for the applicable market and anticipated transaction,
  • determining the efficient corporate structures,
  • drafting of underlying agreements, including for regulating the PPP arrangements, Government Support Agreement (if applicable), negotiations with state authorities and third parties,
  • support with applying for tenders, a consultancy with legal aspects of the application,
  • support with establishing the Special purpose vehicle, drafting the charter and corporate documents, assistance with negotiating project agreements,
  • indicating available procurement sources, loans, project financing tools, as well as consultancy on or drafting of underlying agreements and support with negotiations with relevant parties,
  • consultancy on compliance issues with requirements applicable to the company. 
• For clients operating Energy and Infrastructure projects in Armenia, we provide:
  • day-to-day assistance and general consultancy on employment, corporate and contract law issues, taxation as well as further assistance with compliance with any requirements applicable to the sector,
  • consultancy on specific regulations and procedures applicable to companies of the energy sector, support with particular issues including adjustment of tariffs, the extension of licenses and permits,
  • representation before administrative bodies, consultancy and representation within administrative procedures, assistance with drafting and submitting the necessary report and replies to inquiries of state bodies,
  • consultancy with applicable environmental law regulations and support during audits,
  • sector-specific litigation and arbitration: we represent clients in disputes (within both Courts and Alternative Dispute Resolution mechanisms) against administrative bodies and private entities, as well as defend their rights within criminal law proceedings.

The Notable recent cases of the firm in this sector include:

• The firm has advised a foreign company willing to enter the Armenian renewable energy market (small solar energy power plant): we have provided legal consultancy on the laws applicable to entities entering the market, including legal advice on the processes of acquiring relevant licenses, construction permits, tax law implications and other related matters.
• The firm’s senior partner Aram Orbelyan acted as legal counsel in the project for the construction of utility-scale Masrik-1 solar PV power plant with 50-55 MW. Notably, he served as a part of a consortium, advising the Government of Armenia on the matters related to structuring and pursuing the tender for engaging contractors for the said project, assisting the preparation of the full package of documents of the Request for Quotations, including the full package of the project documents, as well as has supported the client in the negotiations with the shortlisted and final participants. 
• The firm represented an operator of a small HPP in a dispute with the Electric Networks of Armenia in a dispute related to the issues with connection of the HPP to the electric network and related matters (defending against the claim by the ENA on damages due to allegedly wrongful connection).
• Since 2018 the firm’s specialists are annually engaged by the Energy Charter Secretariat in research for Energy Investment Risk Assessment. Within this research, the specialists address several questions impacting the Risk environment for Investment in the Energy Sector in Armenia.