ARMENIA REFUSES EU LOAN FOR SHUTTING ONLY ATOMIC POWER PLANT

The Associated Press
September 25, 2007 Tuesday 6:09 PM GMT

Armenia will refuse a 200 million euro ($283 million) loan from the European Union to close its only atomic power plant, a government official said Tuesday, reiterating that the country currently has no other major source for electricity.

The impoverished former Soviet republic has been under persistent pressure from the EU and others to shut down the aging Soviet-built Medzamor reactor due to safety concerns.

Located about 30 kilometers (20 miles) west of the capital Yerevan, the plant was taken out of operation after a devastating 1988 earthquake, but returned to service in 1995 amid a severe energy shortage. It currently supplies nearly 40 percent of the country's power.

EU envoy Gunnar Wiegand told reporters in Yerevan that the bloc was again ready to provide loans to close Medzamor.

"We call on the Armenian authorities to quickly close the station. This atomic plant cannot function safely for very long," he said. "However, we recognize the necessity to find alternative sources of energy for the energetic development of Armenia and to preserve its rate of growth."

Foreign Ministry spokesman Vladimir Karapetian said the proposal for closing Medzamor was presented as part of the country's cooperation agreement with the EU.

"We have no disagreement on the need to close the station," he said, "but we cannot today take this step without alternative sources of energy. Armenia is undertaking serious steps in this direction."

Energy Minister Armen Movsisian has said the only real alternative to shutting Medzamor would be building a new atomic plant at a cost of at least 2 billion euros ($283 billion).

President Robert Kocharian has pledged to build such a plant.