In a strategic move reflecting profound geopolitical shifts in the South Caucasus region, the United States and Armenia signed a landmark agreement to enhance cooperation in the field of civilian nuclear energy. This agreement paves the way for potential U.S. exports of nuclear technology and equipment to Armenia with an initial value of up to $5 billion, marking a significant leap forward in bilateral relations between the two countries.
Armenian Prime Minister Nikol Pashinyan and senior U.S. officials signed a joint statement in Yerevan confirming the completion of negotiations on the so-called “123 Agreement,” the legal framework governing peaceful nuclear cooperation under the U.S. Atomic Energy Act of 1954. This agreement is a prerequisite for any country wishing to acquire U.S. nuclear technology, as it ensures its adherence to strict standards of nuclear non-proliferation and exclusively peaceful uses.
Background and importance of the nuclear energy sector in Armenia
This agreement comes at a crucial time for Armenia, which relies heavily on the Metsamor nuclear power plant to meet its electricity needs. The Soviet-era plant provides nearly 40% of the country's total electricity consumption, making it a cornerstone of national energy security. However, the plant has faced international criticism, particularly from the European Union and neighboring Turkey, due to its outdated design and location in a seismically active region. Yerevan has been seeking solutions for years to modernize its nuclear sector or build a new, safer, and more efficient reactor, and the partnership with the United States opens the door to advanced technologies, including small modular reactors (SMRs) promoted by American companies.
The strategic and geopolitical dimensions of the agreement
The agreement's significance extends beyond the technical and economic aspects, encompassing crucial strategic dimensions. This move is seen as part of Armenia's growing westward orientation and its reduction of historical dependence on Russia, its traditional military and nuclear partner. By diversifying its energy partnerships, Armenia seeks to bolster its sovereignty and diminish Moscow's influence. Regionally, this deal may attract the attention and scrutiny of neighboring states such as Azerbaijan, Iran, and Turkey, and could reshape the power dynamics in the complex South Caucasus region.
Economic impact and the future of energy
According to US officials, the agreement not only allows for initial exports of $5 billion but also includes the possibility of signing long-term contracts for the supply of nuclear fuel and maintenance services worth up to an additional $4 billion. Armenian Prime Minister Nikol Pashinyan stated that “this agreement will open a new chapter in strengthening the partnership between Armenia and the United States in the energy sector.” This cooperation represents an opportunity for Armenia to modernize its critical infrastructure, ensure a stable and sustainable energy supply, and contribute to global efforts to transition to clean, low-carbon energy sources.
