This Follow-up Report on the Investment Climate and Market Structure of the Republic of Armenia was developed by Armenian authorities and reviewed by the Investment Group of the Energy Charter in 2007. This report updates the 2004 In-depth Review of Armenia's Investment Climate and Market Structure and looks at the main developments in the energy sector of Armenia since that time. The follow-up report addresses the recommendations adopted by the Energy Charter Conference in June 2004 on the basis of the initial review.
The report notes that the government has developed economic and fiscal policies and a poverty-reduction strategy in cooperation with the World Bank and the International Monetary Fund. According to the 2007 annual survey of economic freedom conducted by the Heritage Foundation/The Wall Street Journal, Armenia's economy is 69.4% free, which makes it the world's 32nd freest economy. The UNCTAD Inward FDI Performance Index by host economy for the period 2003-2005 places Armenia among the top 30 countries in terms of growth of FDI performance.
Armenia is completely dependent on imported natural gas and oil products. Domestic energy production is essentially limited to hydropower plants, two thermal power plants and one nuclear power plant. Armenia's energy strategy, therefore, consists of securing energy supply from abroad, and further developing domestically available renewable energy sources.