Armenia Moves to Seize Energy Giant from Jailed Tycoon

The Armenian parliament has taken a decisive step towards nationalizing the country’s core electricity provider, Electric Networks of Armenia (ESA), in a move that dramatically escalates the government’s confrontation with a prominent oligarch. The bill, which passed its first reading with 65 votes in favor and 30 against, paves the way for Prime Minister Nikol Pashinyan’s administration to assume control of the strategic asset by the end of July.

The new legislation would grant Armenia’s Public Services Regulatory Commission the authority to replace the company’s management if serious violations are discovered. ESA, owned by the embattled billionaire Samvel Karapetyan, holds a monopoly over Armenia’s 36,000-kilometer electricity grid, acting as the sole buyer from power generators and the exclusive seller to consumers nationwide.

The opposition has fiercely condemned the initiative as “state racketeering” and a form of political pressure. The move comes shortly after Karapetyan’s arrest on June 18 on charges of inciting a coup. The accusations stemmed from his public vow to defend the Armenian Apostolic Church against what he described as attacks from the Pashinyan government. He now faces a potential prison sentence of up to five years.

This high-stakes battle is deeply intertwined with a wider conflict between the state and the powerful Armenian Apostolic Church. The government’s pressure campaign has also led to the arrest of two archbishops, who are similarly accused of involvement in an anti-government conspiracy. Concurrently, Pashinyan’s administration continues to insist on the resignation of the head of the Church, Catholicos Garegin II.

Conflicting narratives surround the affair. Karapetyan’s lawyer, Aram Vardevanyan, claims the billionaire’s arrest was a pretext to facilitate the seizure of his company. Prime Minister Pashinyan, however, alleges that Karapetyan initiated the conflict over the church to create a public distraction, knowing that the nationalization of ESA was already being planned. Pashinyan also accused the tycoon of intentionally allowing the nation’s energy infrastructure to degrade to foment public discontent.

As tensions mount, Karapetyan’s Tashir Group called for a public march in his support. Pashinyan responded with accusations that ESA employees were being coerced into attending the protest under threat of dismissal, promising legal action against managers who exert pressure and protection for those who refuse to participate.

Adding another layer of complexity, Armenia’s Investigative Committee conducted a search of the Tashir Group’s office in connection with a separate criminal investigation. Authorities clarified that this probe, focused on alleged large-scale money laundering and tax evasion, is unrelated to the coup charges against Karapetyan.

Analysts suggest the government’s swift actions indicate a well-prepared strategy. Grant Mikaelyan, a research fellow at the Caucasus Institute, speculates that ESA might be temporarily run by the state before being re-privatized, possibly to a businessman close to the prime minister. Mikaelyan notes that the impact on Armenia’s investment climate is ambiguous, as foreign observers may see the move not as a broad anti-business policy, but as a targeted action against a specific, influential investor.