Armenia's “Nuclear Turn” Toward The U.S. And Moscow's Reaction To Yerevan's SMR Strategy

By Sergey Sukhankin

Armenia’s agreement with the U.S. on cooperation in the civilian nuclear energy may signify a major geopolitical shift in the South Caucasus. Specifically, the deal signals Yerevan’s effort to diversify its energy partnerships and reduce long-standing dependence on Russia, which has dominated Armenia’s nuclear sector since the Soviet era. Moscow`s response to the news has been very critical. Russian experts and policymakers warned about technological risks and questioned the feasibility of U.S.-supplied Small Modular Reactors (SMRs). Russian officials and state media frame the initiative as both a security concern and a geopolitical challenge, emphasizing Rosatom’s experience and warning that Armenia could become a testing ground for unproven technologies.

BACKGROUND:

Armenia’s nuclear sector has historically been closely linked to Russia. Armenia’s Nuclear Power Plant at Metsamor, built during the Soviet period, supplies up to 31 percent of the country’s electricity. The plant’s second unit continues operating after modernization programs that extended its lifetime (until 2036) and upgraded its capacity. Due to particularities of the nuclear-producing energy sector, Armenia’s dependence on Russia is complex and multidimensional extending to maintenance of infrastructure, scientific cooperation and other aspects, deepening the dependency on Russian involvement in the country’s energy system. Metsamor’s aging reactors and the country’s growing electricity needs have forced Armenian authorities to consider constructing a replacement facility. Thus, the government began evaluating options for new nuclear capacity examining potential cooperation with multiple countries including Russia, the U.S., China, and South Korea. Armenia’s Prime Minister Nikol Pashinyan emphasized that the government would select the partner offering the most competitive combination of price and technology.

The turning point came in February 2026, when the U.S. and Armenia finalized a civil nuclear cooperation agreement. The agreement establishes the legal framework for exporting nuclear technology to Armenia and opens for U.S. companies to participate in building a new nuclear facility. Furthermore, during a visit to Yerevan (9–10 February), U.S. Vice President J.D. Vance announced that Washington could invest up to US$ 9 billion in Armenia’s nuclear energy sector, which includes long-term fuel and maintenance contracts.

Small modular reactors are central to Armenia’s new strategy – this was clearly voiced by Prime Minister Nikol Pashinyan in October 2024, when he mentioned that the Armenian government aims to build a small modular reactor as the next nuclear facility. The main competitive advantages of these facilities is that they are viewed as more flexible and potentially cheaper to deploy in smaller energy markets. Armenia’s government believes that over the years the technology could provide a suitable replacement for the Metsamor facility while maintaining the country’s energy security.

Predictably, the initiative has triggered a strong and quite negative reaction in Moscow: Russia’s state nuclear corporation Rosatom currently plays the key role in Armenia’s nuclear sector and has long been interested in building new reactors in the country. Therefore, the possibility that Armenia might select an American reactor technology threatens Russia’s economic interests and influence in a region traditionally considered part of Moscow’s geopolitical sphere. Russian media outlets have framed the agreement as a major strategic shift in Armenia`s foreign economic policy, and rather unfriendly toward Russia. Commentators in Russian publications argue that Pashinyan’s decision could weaken Russia’s position in the South Caucasus while strengthening US influence in Armenia’s energy infrastructure, establishing a long-term strategic foothold. Clearly, the debate therefore extends beyond energy policy and touches on the broader geopolitical rivalry between Russia and the West.

IMPLICATIONS:

In Russian argumentation, Armenia’s nuclear agreement with the US carries multiple strategic implications where two factors tower above others. First, the deal is described as threatening both Russia’s dominance in Armenia’s energy sector and its global position as a leading actor in nuclear technologies. Rosatom has invested significant resources in maintaining the Metsamor plant and extending its operational life. Russia, primarily through Rosatom and state-backed financing, has invested hundreds of millions of dollars in the modernization of Armenia’s nuclear plant, including a US$ 270 million loan, a US$ 30 million grant, and additional upgrade contracts. Russian officials have also repeatedly highlighted Russia`s global leadership in nuclear construction and its extensive experience in operating reactors abroad. In this context, losing the Armenian market to U.S. competitors would represent both an economic loss and a symbolic blow to Russia’s international nuclear industry.

Second, Russian officials have emphasized safety concerns related to the proposed SMR project. Sergei Shoigu, secretary of Russia’s Security Council, warned that Armenia’s location in a seismically active region makes nuclear construction particularly sensitive. According to Shoigu, Soviet engineers designed Metsamor’s foundation to withstand the devastating 1988 earthquake, demonstrating the reliability of Russian technology. He argued that the introduction of unfamiliar reactor designs could introduce new safety risks that regional governments would have to consider.

Shoigu also questioned the technological maturity of U.S. SMR designs. He pointed out that the U.S. has yet to complete a fully operational SMR project domestically, suggesting that the technology remains largely untested in practice. Foreign Ministry spokeswoman Maria Zakharova warned that Armenia could effectively become a testing ground for experimental U.S. nuclear technologies if it proceeds with the project, and that the scale of the proposed US$ 9 billion agreement raises questions about financial risks and long-term feasibility. Safety concerns resonate strongly across the post-Soviet space due to the legacy of major nuclear accidents, most notably the 1986 Chernobyl disaster. The memory of such incidents continues to shape public perceptions of nuclear energy from Belarus to the South Caucasus and Central Asia. Thus, arguments emphasizing nuclear safety, which Russian officials frequently invoke in discussions about Armenia’s potential adoption of small modular reactors, are not merely rhetorical but can find receptive audiences in societies where historical experience has made the risks associated with nuclear technology particularly salient.

Despite these tensions, Armenian officials insist that the decision regarding a new nuclear plant has not yet been finalized and that Yerevan continues to review proposals from multiple partners, including Russia. Armenian authorities have even requested additional technical briefings from Moscow regarding Russian modular reactor technologies, indicating that competition for the project remains open.

Another factor that could affect a potential U.S.-Armenia nuclear deal is Armenia’s upcoming parliamentary election on June 7. Some Western experts believe that the U.S.-Armenia nuclear agreement would likely be weakened or delayed if Pashinyan is defeated in the elections, however not automatically disbanded. (Pro)Russian experts suggest that an opposition win could sharply change Armenia’s foreign-policy course, improving ties with Moscow.

The Armenian side clearly understands that the final decision, should it not comply with Russia`s expectations, would have broader geopolitical implications for the country. This has an even more pronounced meaning given that over the past several years political relations between Russia and Armenia have deteriorated as Armenia has sought to diversify its foreign policy and strengthen ties with Western partners. For Russia, the potential loss of influence in Armenia’s nuclear sector represents much more than a commercial setback – it could manifest a broader erosion of Moscow’s role in the South Caucasus at a time when Western countries are expanding their presence in the region and Russia’s influence and posture are eroding.

CONCLUSIONS:

Armenia’s nuclear cooperation agreement with the U.S. marks a potentially transformative moment in the geopolitics of the South Caucasus. While the project remains at an early stage and Armenia continues to evaluate competing proposals, the possibility that U.S. companies could build the country’s next nuclear reactor has already triggered strong negative reactions in Moscow. Russian officials have criticized the proposal on technical, economic, security and geopolitical grounds, emphasizing safety concerns and highlighting Rosatom’s experience in nuclear construction. At the same time, Russian media portray the initiative as part of a broader Western strategy to expand influence in Armenia and weaken Russia’s traditional role in the region, in strategic proximity of southern Russia. For Armenia, the nuclear agreement represents an effort to diversify strategic partnerships and strengthen energy independence. Yet the decision also clearly carries risks, including exacerbated political friction with Russia. Ultimately, the competition over Armenia’s nuclear future illustrates the intensifying geopolitical rivalry shaping the South Caucasus. The outcome of this contest will influence not only Armenia’s energy security but also the balance of power in a region where infrastructure, economics, and geopolitics remain deeply intertwined.

AUTHOR’S BIO:

Dr. Sergey Sukhankin is a Senior Fellow at the Jamestown Foundation and the Saratoga Foundation (both Washington DC) and a Fellow at the North American and Arctic Defence and Security Network (Canada). He teaches international business at MacEwan School of Business (Edmonton, Canada). Currently he is a postdoctoral fellow at the Canadian Maritime Security Network (CMSN).

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