Armenia had been seeking a loan agreement with Russia for the modernisation of the Russia-supplied plant.
Russia’s state-backed news agency Tass said recently that Russia’s finance ministry has already approved an extension of the loan, originally taken out in 2016.
However, the Russian company attached new conditions, which Yerevan rejected, press reports said.
“We will draw funds from our internal resources, which will certainly have better conditions,” prime minister Nikol Pashinyan told a government meeting.
He said the government would raise around about $130m by issuing government bonds on the domestic market.
According to local media, Russia’s state nuclear corporation Rosatom and the plant signed a $300m loan agreement in 2015 covering extended operation and the provision of components and materials.
The Armenian side used nearly $200m and asked Rosatom to disburse a further $100m, but the Russian company attached new conditions, which Yerevan rejected.
The single-unit Armenian nuclear station, about 25 km outside the capital Yerevan, is a 375-MW VVER-V270 pressurised water reactor that began commercial operation in 1980.
Armenian-2 provides about 27% of Armenia’s electricity. Armenia-1 was permanently shut down in 1989.
Atomenergoremont, a subsidiary of Rosatom, began lifetime extension work at the plant in June 2018.