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European Firms Discuss Investment In Nagorno-Karabakh

Nagorno-Karabakh is looking to develop its hydroelectric power, possibly in conjunction with foreign investors.
Nagorno-Karabakh is looking to develop its hydroelectric power, possibly in conjunction with foreign investors.
STEPANAKERT -- A group of businessmen from Austria, the Czech Republic, and Slovakia have visited the breakaway Azerbaijani region of Nagorno-Karabakh to look at investment opportunities, RFE/RL's Armenian Service reports.

The delegation met February 4 in Stepanakert with the disputed territory's Armenian leadership.

Ashot Grigorian, the Armenian-born owner of a Slovak energy-consulting firm who organized the trip, said the entrepreneurs are interested in the local energy, construction, and agricultural sectors. He said they would like to start out with pilot projects worth a total of at least $15 million.

"For the time being, we are talking about each of the firms investing only several million dollars," Grigorian told RFE/RL. "But if the process goes well, they will invest more serious sums."

Bako Sahakian, the self-proclaimed president of the unrecognized Nagorno-Karabakh Republic (NKR), was quoted by his office as welcoming foreign investors visiting Stepanakert and promising to support them.

Georgi Petrosian, the NKR "foreign minister," said he had warned the entrepreneurs that their projects would anger Azerbaijani officials, which considers any foreign investment in Karabakh to be illegal.

But Petrosian said the investors were unfazed by the likelihood of Azerbaijani protests against their plans.

"The energy sector is particularly attractive to them because the Karabakh government has adopted an exceedingly progressive program," said Grigorian. "They are going to build a cascade of hydroelectric stations. Karabakh is laying the foundation of a modern energy system that doesn't exist elsewhere in the South Caucasus."

Under that program, Karabakh plans to stop importing electricity from Armenia in 2012 and be able to export power generated by its rivers in the following years. Ara Harutiunian, the Karabakh "prime minister," said in late December that "food security and energy independence" are his government's chief economic priorities.

Grigorian said talks with Karabakh leaders, though productive, did not always go smoothly.

"I think that apart from economic calculations, people in Karabakh should also take into account the fact that when a plant is opened here [by foreigners] it marks a further step toward recognition of their independence," he said.

"People in Karabakh take out their calculator and start calculating [potential] profits and so on, and if they see that the profits are not that high, they say, 'Invest in Armenia,'" Grigorian said.

Armenians and Azerbaijanis fought a war from 1991-94 for control of Nagorno-Karabakh. Armenian forces captured nearly all of the Azerbaijani region and large swaths of territory adjoining Karabakh, which they still control.