Armenia’s Lake Sevan contributes $400 million annually to the national economy according to a two-year project is being implemented with the support of the Asian Development Bank (ADB), with the participation of the Armenian Ministry of Environment and the Water Committee.

Here’s the breakdown as per the “Strengthening Environmental Resilience and Fostering Sustainable Economy for Lake Sevan" Project’s preliminary research.

Tourism - $222 million

Agriculture - $110 million

Historical/Cultural - $31 million

Energy (Hydro) - $26 million

ADB Head of Climate Change Programs Vardan Karapetyan, who also coordinates the program, tells Hetq that while assessing the economic value on natural capital and a natural ecosystem sounds quite vulgar, from the point of view of assessing the justification for the investment, one should calculate how much value or benefit Sevan generates annually,”

Karapetyan explains that the project’s goal was to assess what kind of ecosystem services Sevan provides, calculate the economic value these services create, and what part of them is at risk if measures aimed at wastewater treatment are not implemented in Sevan.

“I always say that when something is imperfect, you pay for it, even indirectly. Now, unfortunately, Sevan is paying for the imperfections of our systems. Our irrigation network is still flawed, and we compensate for water losses from Sevan,”   Karapetyan says.

Improving Lake Sevan with biological wastewater treatment plants

This program looked at the need for biological wastewater treatment plants. Technical work has been conducted to find out what solutions are possible for wastewater management, a major problem affecting Sevan. Two main models have been proposed to the government: more centralized and less centralized drainage and treatment.

The most centralized model proposed connecting up to 65% of the Sevan basin sewage network to three treatment plants in Gavar, Martuni and Vardenis. The less centralized model considered connecting up to 35% to the same plants. Everything that is not connected to these systems will be cleaned using decentralized solutions. These include, for example, the creation of septic tanks for multiple houses.

Feasibility studies have shown that in the long term and from an operational point of view, the most centralized model is more expedient, i.e., building a sewage network that will deal with 65% of the basin’s sewage via biological treatment plants.

In parallel, the design of a sewage network of up to 570 km in the Sevan basin is being implemented.

Karapetyan says that it will also be necessary to improve the legislative framework and the livestock sector, so that, for example, unnecessary farm fertilization is not conducted.

How much will the biological plants and the sewage network cost?

According to preliminary calculations, to modernize the treatment plants and ensure the capacity of the biological plant, as well as to build the mentioned sewage networks, an investment of $80-200 million will be necessary in a phased manner.

Karapetyan says if this figure is correlated with the $400 million annual benefit of Lake Sevan, it becomes obvious that the investment in wastewater plants makes sense, which, when divided over a twenty-year period, will amount to $6-15 million annually.

He stresses the importance of preserving Sevan’s natural ecosystems and hopes the government will act accordingly.

“We have many programs aimed at road and physical infrastructure construction, but lack a program aimed at environmental protection. In this sense, we are trying to present Sevan as the most important, also because Armenia is preparing to host the Conference of the Parties to the Convention on Biological Diversity, CBD COP17,” Karapetyan tells Hetq.

He believes the Lake Sevan project should be presented at the conference as a step towards the preservation of Armenia’s greatest natural capital.

Who will operate the biological treatment plants?

Still undecided is who will operate the treatment plants and who will pay for them.

Calculations have shown that if the state transfers this burden to the consumer, they will pay one dram (USD 0.0026) more to ensure the well-being of Sevan.

Alexander Arakelyan, the expert on water resources management and climate change for this project, tells Hetq that if Lake Sevan suffers from greater water pollution, Armenia faces drastic environmental, cultural, recreational, and economic losses. 

Arakelyan, Head of the Geoinformation Laboratory and Library of the Institute of Geological Sciences at Armenia’s National Academy of Sciences, believes that if the government is unable to all the money needed, the project can be implemented with loans.

The issue of operating costs and their distribution models are now being discussed. Increasing the water rate is the simplest model, which according to Arakelyan, will be inevitable  since water is quite cheap in Armenia.

Another option being considered is a symbolic amount as a tourist tax, which is done in many countries. Or environmental funds can be created by fining polluters.

Arakelyan says that until the government decides on which option to use, the final calculation of the investment package will not be made.

He says that in addition to modernizing the Martuni, Vardenis, and Gavar treatment stations, the largest expense is the construction of sewer lines since only fifty percent of communities are connected to treatment plants. Work is being conducted to identify areas where decentralized solutions are needed to fully cover the Sevan basin.

Who will operate these plants is also at issue. If the job is handed over to Veolia Jur (Veolia Water), then who will service these stations after the end of the contract? (Veolia Jur, a subsidiary of the French Veolia Group, which manages all water and wastewater systems in Armenia.

“Foreign experience shows that treatment stations are under community control, but in our country, community resources in terms of knowledge, specialists and finances may not be sufficient. In addition, how and by whom should the servicing of decentralized sections be conducted?” Arakelyan asks.

 He notes the more centralized the system, the more customers connected to that system, the cheaper it becomes.

The Lake Sevan technical assistance program will end in December 2025. A tender for the design of biological treatment stations will also be announced soon for the Vardenis, Gavar and Martuni stations. A complete package will then be presented to the government.