Russian-backed companies ordered to halt social projects in Armenia

Major companies operating in Armenia with Russian capital have been instructed by higher authorities to immediately cease funding all charitable programmes, foundations, and social initiatives, according to a report by Armenian news outlet.

A spokesperson from one of the affected companies said that the directive was issued recently, but they have not been provided with further details, Caliber.Az reports.

It remains unclear whether the decision is motivated by political or economic considerations.

Industry insiders suggest the move is likely politically driven, noting that even during the peak of the Russia-Ukraine conflict, Russian-backed firms continued to support various public and community projects across Armenia.

As a reminder, Armenia hosts a notable presence of companies with Russian capital, which have become key players in various sectors, including energy, banking, telecommunications, and metallurgy.

According to a 2023 report by the European Bank for Reconstruction and Development (EBRD), Russian investments have historically been among the largest foreign inflows into Armenia’s economy, significantly influencing its industrial and service sectors.

Key companies include Gazprom Armenia, a subsidiary of Russia’s gas giant Gazprom, which controls the majority of Armenia’s natural gas supply and infrastructure. Another major Russian-owned entity is VTB Bank Armenia, part of Russia’s VTB Group, providing extensive banking services within the country.

Telecommunications giant VEON also operates in Armenia through its subsidiary Viva-MTS, offering mobile and internet services.

The presence of these companies has been critical for Armenia’s economic development, but also creates geopolitical complexities, especially amid strained Armenia-Russia relations and the wider regional security environment.

The International Crisis Group highlights that Russian capital’s economic influence often intersects with political considerations, affecting Armenia’s domestic and foreign policy.

By Aghakazim Guliyev