Page 43 - Small Stans and Causcasus Outlook 2022

and rainfall patterns. Thermal power, with major plants in Yerevan and
Hrazdan, provides the bulk of the remaining generation.

Since 2006, Electric Networks of Armenia (ENA) has been the sole
electric power distributor in the country. It is Armenia’s largest employer
and serves approximately 985,000 electric utility customers. ENA’s
owner, Tashir Group, announced that, in cooperation with international
financial institutions, it will invest about $900mn in upgrading the
network infrastructure in the next few years.

The High Voltage Electric Networks–a state monopoly operated as a
closed joint stock company—manages the assets of Armenia’s
transmission network, performs operational and maintenance functions,
and implements necessary investment programmes. The Electro Power
System Operator CJSC is responsible for the strategic functioning of
Armenia’s power system. The Public Services Regulatory Commission
establishes the procedures for setting and reviewing tariffs.

In 2021, Armenia signed a contract to develop the country’s largest
solar power plant. The UAE firm Masdar will develop a 200 MW plant
that will cost roughly $174mn

3.1.5 Construction

Information on the construction sector in Armenia is very limited. In
August, it was reported that Armenia saw the highest growth in
construction of all Eurasian Economic Union member countries in the
first half of 2021, with 2.4 times as much housing construction
commissioned in this period versus the first six months of 2020. In the
first half of 2021, Armenia saw a 26% increase in its volume of
construction y/y.

3.1.6 Major Sectors

The IT sector in Armenia is the most notable sector of the economy. As
the US Department of Commerce notes, the number of firms actively
operating in the IT space exceeds 1,000, employing more than 20,000
workers, and yielding more than $1bn annually, while growing at 20%.
Revenue from the sector in the first six months of 2021 was
AMD159.9bn ($306.3mn). In August, Armenia achieved its first tech
unicorn, with the Yerevan-based firm Picsart raising $130mn in a Series
C funding round on a $1.5bn valuation. Two other Armenian firms,
Cognaize and Embodied, are reportedly en route to becoming unicorns,
while tech development agencies aim at Armenia having 10 unicorns in
the next five years, with at least 1,000 employees each.

Tourism is another sector in Armenia that was growing at a rapid rate,
but has been devastated by the pandemic and has not yet recovered.
In Q1 2021, Armenia recorded only 86,524 overseas tourists, a 76%
decline y/y. Security factors also played a role, with Azerbaijani military
activity on the borders of Armenia’s southern Syunik province in
particular scaring away potential visitors.

43 Small Stans & South Caucasus Outlook 2022 www.intellinews.com