US Pledges $9 Billion to Help Armenia Shift From Russian Energy

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(Bloomberg) — US Vice President JD Vance signed a civil nuclear cooperation agreement with Armenia on Monday, pledging as much as $9 billion in potential investment as the South Caucasus country seeks to reduce its long-standing reliance on Russia for energy.

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The accord, known as a Section 123 agreement, establishes the legal framework for US companies to export nuclear technology, fuel and services to Armenia. It opens the door for American firms to compete for a deal to replace the Soviet-era Metsamor nuclear power plant, which currently supplies about 40% of the country’s electricity, with small modular reactors.

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“It’ll pave the way for American and Armenian companies to strike deals on civil nuclear projects. That means up to $5 billion in initial US exports, plus an additional $4 billion in long-term support through fuel and maintenance contracts,” Vance said at a briefing in Yerevan. “This is a classic win-win for both Armenia and the United States of America. It means stronger energy security for my own country, stronger energy security for Armenia, and it’s also going to create a lot of new jobs.”   

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Armenia has relied on Moscow for both energy and security since independence. Metsamor is operated by Russia’s state-owned Rosatom Corp., and nuclear fuel for the plant is imported from Russia. Ahead of Vance’s visit, Rosatom officials met Armenian leaders in Moscow, offering what they described as “comprehensive cooperation” on new nuclear capacity.

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Prime Minister Nikol Pashinyan’s government has increasingly signaled a shift toward Western reactor designs, citing safety, diversification and energy sovereignty. Officials have framed the move as a strategic decision rather than a purely commercial one.

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Speaking alongside Vance, Pashinyan said the agreement would open a “new chapter” in U.S.-Armenian energy ties and help diversify Armenia’s energy mix by introducing what he described as “safe and innovative” technologies.

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The nuclear deal forms part of a broader US effort to assert itself in the South Caucasus, wedged between Russia, Turkey and Iran, amid shifting regional alliances. Washington and Yerevan are also increasing defense cooperation, with Armenia receiving an $11 million shipment of US drones, according to Pashinyan. 

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Vance is scheduled to travel to Baku on Tuesday, where US and Azerbaijani officials are expected to discuss defense and energy cooperation.

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The visit comes months after President Donald Trump mediated the signing of a draft peace agreement between Armenia and Azerbaijan. Under the framework, a proposed transit corridor through Armenia has been dubbed the Trump Route for International Peace and Prosperity, or TRIPP.

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Armenia and Azerbaijan have fought multiple wars since the collapse of the Soviet Union, primarily over Nagorno-Karabakh. After Azerbaijan regained most of the territory in a 2020 war, it launched an offensive in 2023 that brought the region under the full control of Baku and triggered the exodus of more than 100,000 ethnic Armenians.

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