World Bank to provide US$55 million loan to Armenia for improving infrastructure in popular tourism destinations in five regions

ArmInfo. On December 22, the World Bank Board of Executive Directors approved a US$55 million loan for the Local Economy and Infrastructure Development Project (LEIDP) for Armenia to improve infrastructure services and institutional capacity for increased tourism contribution to the local economy in five selected regions of the country. Laura E.  Bailey, World Bank Country Manager for Armenia, told a news conference today that total financing of the project is US$68 million, of which US$13 million will be the Armenian Government's contribution. The World Bank will provide a US$55 million IBRD loan of variable spread with a 14.5-year grace period and the total repayment term of 25 years.

She said LEIDP is a five year project that will help Armenia develop infrastructure in popular tourism destinations and reduce the difference in economic development of regions and Yerevan. Laura E.  Bailey said the project will increase the number of rooms at not-large hotels by 3,000 places and the incomes from tourism in the regions will grow by 15%. Ms. Bailey anticipates an increase in the number of small and medium-sized enterprises engaged in the field of tourism and hospitability from 1,800 to 9,000.

WB specialists say it will be a complex project including partial recovery and conservation of historical monuments listed as UNESCO World Heritage Sites, as well as construction of roads, parking sites, and other infrastructures, which will make up US$48 million.  The project demonstrates an integrated approach to development of tourism corridors and circuits for diversifying and improving Armenia's tourism products, which could increase spending and deliver a more robust tourism-led local economic development. The Project activities are expected to benefit the residents, tourists and enterprises.

More specifically, the first component - Heritage Hub Regeneration and Tourism Circuit Development - will finance urban regeneration activities in the old towns of Goris and Meghri, and in the heritage villages Areni, Tatev and Tandzatap. This includes restoration of public infrastructure, building facades and roofs, public spaces, museums, access roads, water and sanitation, drainage and street lighting.

This component will also finance an integrated approach to cultural heritage preservation and improved site management plans of the most attractive cultural and natural heritage sites located along the main tourism circuit in Armenia: Garni (Temple and Gorge), Geghard Monastery, Dvin Museum, Khor Virap Monastery, Areni marketplace and cave, Mozrov cave, Zorats Qarer (Karahunge/Stonehendge), Khndzoresk and the two UNESCO Sites of Haghpat and Sanahin.

Ms. Bailey brought the example of the tourism development project recently implemented in Kakheti, Georgia. "I would like to highlight that one of the major strengths of the proposed project is that it motivates the communities to preserve their unique Armenian cultural heritage and helps benefit from integrating tourism in wider local economic development," she said.

The second - Institutional Development component - will increase the institutional capacity and performance of the Development Foundation of Armenia (DFA), the Ministry of Economy (MoE), responsible for overall coordination and policy support of the Project, the Historical and Culture Heritage Protection Agency (HCHPA), and the Armenia Territorial Development Fund (ATDF), as the implementing entity, to carry out tourism related activities at the various levels in a sustainable manner.

The first year investment program will capture numerous activities for improvements at Khor Virap Tourism Facility; Garni Gorge with rehabilitation of 1.6 km road leading from Garni Temple to the Stone Symphony monument, located in Azat River Gorge;Zorats Qarer (Stonehenge) Tourism Facility with improvement of the road leading to the monument.

Since joining the World Bank in 1992 and IDA in 1993, the total IDA and IBRD commitments to Armenia amount to around US$2.3 billion.

It is noteworthy that Smithsonian Institution and UNDP are expected to implement a similar tourism development project on more moderate funds. A private initiative successfully operating in the country is IDeA Foundation that implemented a project of Tatev Monastery Restoration and Construction of the "Wings of Tatev" - the world's longest reverse ropeway as well as development of modern tourism infrastructure in the resort town of Dilijan.