Lead: On Monday in Yerevan, US Vice President J.D. Vance and Armenian Prime Minister Nikol Pashinyan finalized negotiations on a US-Armenia “123 Agreement” to govern civil nuclear cooperation. The accord centers on small modular reactors (SMRs) and would enable up to $5 billion in initial US exports, plus about $4 billion in longer-term fuel and maintenance contracts. Armenian officials framed the deal as a pathway to replace the ageing Metsamor nuclear plant, while US officials emphasized options and standards rather than an exclusive purchase obligation. Vance also raised broader economic and security cooperation, including advanced chips and surveillance drones.
- Scope: The agreement is a US 123 Agreement enabling American licensing of nuclear technology and materials for civilian use under US nonproliferation rules.
- Financial scale: Vance cited up to $5 billion (€4.2 billion) in initial US exports and an additional $4 billion projected for fuel and maintenance contracts.
- Technology focus: The deal specifically references small modular reactors (SMRs) as the primary category for cooperation and potential supply.
- Non-exclusive choice: Armenia is not contractually bound to buy US reactors; it may select suppliers from a competitive set including Russia, China, France and South Korea.
- Regional context: The visit follows an August 2025 White House agreement between Armenia and Azerbaijan aimed at normalizing ties after decades of conflict.
- Transit diplomacy: Vance promoted a proposed rail and road corridor — the Trump Route for International Peace and Prosperity (TRIPP) — linking Azerbaijan to its Nakhchivan exclave via Armenia.
- Geopolitical shift: Armenia has signaled a move away from Russia’s security umbrella, freezing parts of its pact with Moscow and seeking deeper ties with the US and EU.
Background
Armenia operates the Soviet-era Metsamor nuclear power plant, a facility that many Armenian and international observers consider outdated. Metsamor provided a significant share of domestic electricity but has long raised safety and modernization concerns; replacing or refurbishing it has been a strategic priority for Yerevan. Historically Moscow was the principal security and energy partner for Armenia, and many Soviet-built plants in the region rely on Russian support for fuel and maintenance.
Since Russia’s large-scale invasion of Ukraine in 2022, several South Caucasus states have reassessed their reliance on Moscow. Armenia’s leadership has pursued diversified partnerships with Western capitals and companies to secure energy, investment and political backing. The August 2025 White House-brokered agreement between Armenia and Azerbaijan signaled a fragile but notable diplomatic opening in the region, creating an environment in which Washington can expand commercial and strategic engagement.
Main Event
In Yerevan, Vice President Vance and Prime Minister Pashinyan announced completion of talks on a 123 Agreement, a statutory instrument in US law that enables transfer of civilian nuclear technology under specified safeguards. Vance described the pact as a framework permitting US firms to compete for Armenian projects, particularly SMRs, and quantified potential trade at roughly $5 billion for initial exports and another $4 billion in fuel and upkeep agreements.
Pashinyan affirmed the talks’ importance for Armenia’s energy security and thanked both Vance and President Donald Trump for continued US engagement. Both leaders stressed that the agreement expands Armenia’s supplier options; the Armenian government retains final procurement discretion, meaning no automatic purchase of US reactors is required.
Beyond nuclear cooperation, Vance said Washington is prepared to export advanced semiconductors and surveillance drones to Armenia, signaling a package approach that ties energy, technology and security cooperation together. Vance left Yerevan for planned talks in Baku, signaling US intent to engage both sides as it promotes regional connectivity projects such as TRIPP.
Analysis & Implications
The 123 Agreement is primarily a legal and regulatory gateway: it does not itself procure reactors but permits US firms to bid for Armenian projects while subjecting transfers to US nonproliferation controls. For Armenia, the value lies in expanding vendor options, accessing Western standards for safety and financing, and leveraging offers to secure competitive terms from other suppliers. Economically, the cited $9 billion combined figure (initial exports plus longer-term contracts) would be significant for Armenia’s market but would likely be delivered over many years and contingent on project approvals and financing.
Geopolitically, the deal reflects a westward tilt in Yerevan’s diplomacy and a broader Western opportunity to deepen influence in the Southern Caucasus. If Armenia selects US-derived technology and financing, Moscow may view that as erosion of its traditional leverage, potentially prompting diplomatic pushback or changes in bilateral arrangements. Conversely, Armenia’s non-exclusive procurement posture gives Baku, Moscow and other capitals room to preserve commercial roles.
On the technical side, SMRs appeal to countries with limited grid capacity or needs for modular, lower-capacity baseload power. However, adoption entails stringent regulatory upgrades, workforce training, long-term fuel supply arrangements and robust waste-management plans. The 123 Agreement will require Armenia to meet US safeguards, which could strengthen international oversight but also lengthen project timelines.
Comparison & Data
| Deal Component | US Figures (cited) |
|---|---|
| Initial exports | $5 billion (€4.2 billion) |
| Longer-term fuel & maintenance | $4 billion |
The figures represent US-projected commercial opportunity rather than committed sales. By comparison, full-scale conventional reactor projects often run into multiple billions per unit, while SMRs promise smaller incremental investment, making phased deployment more feasible for countries replacing aging plants. Any practical comparison must consider financing mechanisms, sovereign guarantees and regulatory timelines that will affect final cost and schedule.
Reactions & Quotes
Armenian and US officials framed the agreement as both pragmatic and strategic, emphasizing choice, safety and closer bilateral ties.
“The prime minister has been a great friend of ours and a real ally in peace and development in this region.”
J.D. Vance, US Vice President
Vance’s remark highlighted US framing of Armenia as a partner in regional stability and economic growth.
“Armenia and neighboring Azerbaijan are very close to achieving peace.”
Nikol Pashinyan, Prime Minister of Armenia
Pashinyan linked the energy agreement to broader hopes for normalization with Azerbaijan following the August 2025 White House meeting.
Unconfirmed
- Whether Armenia will ultimately select US suppliers for an SMR project remains undecided and subject to competitive bids and financing terms.
- Timetables for any reactor procurement, construction start dates or expected commercial operation have not been announced.
- How Russia will formally react, or whether it will alter its military and economic posture toward Armenia, has not been made public and remains uncertain.
Bottom Line
The 123 Agreement concluded in Yerevan is primarily a legal framework that opens the door for US firms to compete in Armenia’s possible SMR procurement, while preserving Armenia’s freedom to choose among multiple international suppliers. The deal’s headline financial figures ($5 billion initial, $4 billion longer-term) signal substantial commercial potential but are not immediate contractual commitments.
Strategically, the accord marks an important step in deepening US-Armenian ties and illustrates Washington’s broader push to expand economic and security engagement in the South Caucasus. Implementation will require regulatory upgrades, financing arrangements and careful diplomacy to manage reactions from other regional actors, notably Russia.