Lawmakers voted in favour of plans to build a new 1,200-megawatt unit with a projected cost of four to five billion dollars (2.7 to 3.4 billion euros). Officials have said they expect the new reactor to be completed by 2017.

Energy Minister Armen Movsisian told lawmakers the new reactor would allow Armenia to increase electricity exports, a key source of revenues for the landlocked and resource-poor country.

‘Armenia’s neighbours in the region have an energy deficit and Armenia is the only country that can produce electric power, not only for its own needs, but also for export,’ he said.

‘It must be emphasised that we are not talking about the construction of a new nuclear power plant, but about the construction of a new power unit,’ he added.

Armenia relies on the Soviet-built Metzamor plant, 30 kilometres (18 miles) west of the capital Yerevan, for 40 percent of its electricity needs.

Its current 407.5-megawatt power unit was brought online in 1976. The plant is operated by an affiliate of state-owned Russian power group UES.

The European Union has pleaded with Armenia to shut down the ageing plant, which is in an area prone to earthquakes, and in 2004 offered to provide 100 million euros in compensatory aid.

But Armenian officials say the country cannot afford to do without the plant, which also provides electricity for export to Iran.

The nuclear plant was shut down temporarily in 1988 because of a major earthquake, but resumed operating in 1995 to help stave off a national energy crisis.