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The Armenian government is in talks with US-based power company ContourGlobal over the sale of three major hydropower plants that together account for almost 40% of the country's capacity.

ContourGlobal said in a statement quoted by Armenian media on June 12 that negotiations are at an advanced stage and commercial terms are being finalised. The company added that the purchase price for the three power plants on the Vorotan River in the southeastern Syunik province would be "very significant".

Financing for the deal "will be sourced from outside of Armenia using a combination of ContourGlobal's own resources and those of prestigious international financial institutions," the statement continued. The US Overseas Private Investment Corporation (OPIC) and the International Finance Corporation are expected to support the deal.

ContourGlobal plans to invest in renovation of the generating equipment at the three power plants, which were built 30-40 years ago, and have suffered from a lack of investment in recent years. However, the three plants have combined capacity of more than 400MW, almost as much as the Metsamor nuclear power plant which accounts for around 40% of Armenia's electricity generation.

Armenia's Energy Minister Armen Movsisian recently denied that Yerevan planned to sell the hydropower plants to Russia in return for a discount on gas imports. Should the deal with ContourGlobal go ahead it will see a major US investment into a country and sector very much seen as Moscow's territory.

Complicating matters further, Yerevan is also looking at the possibility of importing gas from Iran, following a hike in Russian gas prices. Iranian gas exports face US-led international sanctions due to concerns over Tehran's nuclear programme.