ARMENIA Trends and Developments Contributed by: Hayk Hovhannisyan and Tachat Voskanyan, HAP
In recent years, there has been an increase in investments in Armenia’s energy sector, which is due to the high assessment of solar and wind energy potential. Major solar projects like “Mas- rik-1” have attracted international investors. This trend is expected to continue in 2025, driven by energy security needs and Armenia’s interna - tional climate commitments. Government poli - cies play a key role, as state support, tax incen - tives, loans, and international partnerships can greatly boost the sector’s appeal. The objectives set within the framework of Armenia’s energy strategy imply an increase in electricity produc - tion from renewable sources, which stimulates market entry not only by local but also foreign companies. Rising interest in M&A is expected to result in major deals, including international investors acquiring Armenian energy companies and local companies merging to create larger, more competitive energy groups. Healthcare system The effects of COVID-19 are still present, leading to a continued growth in investments in health - care innovations and research. This increase is driven by the need to address global healthcare challenges as well as local requirements. In recent years, Armenia has significantly boosted its investments in medical technologies, tel - emedicine, and pharmaceutical research. In 2025, major healthcare deals are expected, especially through international partnerships. Key areas include AI in medicine, modernizing
medical equipment, and expanding local phar - maceutical production. At the same time, Arme - nia’s real estate market has become significantly more active in recent years due to the growth in demand for both residential and commercial spaces. However, with the limitation of income tax return opportunities, a significant decline in this sector and possibly major bankruptcies are expected. An increase in public-private partnerships in urban development is also expected, which may contribute to international investors’ entry into the Armenian market. Thus, Armenia’s M&A market is still in the forma - tion and development stage, but it has signifi - cant growth potential due to positive develop - ments in various economic sectors. Steps taken to improve the investment environ - ment, such as legislative reforms, tax incentives, and simplification of bureaucratic procedures, can stimulate the involvement of foreign inves - tors and the implementation of major transac - tions. These changes will also increase investor confidence, strengthening the attractiveness of Armenia’s M&A market. In the coming years, successful M&A transactions can contribute to market stabilization, the introduction of new technologies, and capital inflow, making Arme - nia a more attractive investment destination in the region.
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