German Development Bank KFW to provide 18.5 million euros in the second phase of the water management program

ArmInfo. The German development  bank KFW will provide EUR 18.5 million in the second stage of the  program "Management of combined water resources/Akhuryan River ". The Armenian government approved the draft of the relevant  loan agreement on December 14.

Deputy Minister of Finance of Armenia Karen Tamazyan explained,  earlier in 2014, the German development bank KfW provided Armenia  with a loan of 50 million euros and a 2 million euro grant for the  implementation of the water management program. The funds were  provided for a period of 15 years with a 5-year grace period at a  fixed loan rate, which was fixed on the day of signing the agreement.   Financial resources will be used to restore the Kaps reservoir. In  the second phase, it is planned to reconstruct the Kumayri irrigation  water tunnel, to create a pipeline system. As a result, an effective  irrigation of the territory with a total area of 740 hectares will be  ensured.

As stated in the certificate of justification for the document, the  loan is granted with a maturity of up to 15 years, with 5 years of  grace period. The maturity of the principal amount is from May 15,  2023 to November 15, 2033. The interest rate is floating (6-month  EURIBOR + fixed spread). A one-time management fee will be 1% of the  loan amount.

Already after the government meeting, responding to the question of  ArmInfo, the head of the State Water Management Committee of Armenia  Arsen Harutyunyan said that the construction of the Cape reservoir is  still under construction. Since 2014, the project invested $ 37.5  million to restore the irrigation system and provide a transition  from a mechanical to a gravity irrigation system. As for the  construction of the Yeghvard water reservoir, as noted by  Harutyunyan, the works are suspended due to the high cost of the  project and its low efficiency. "We have a lot of more significant  projects, the implementation of which will lead to more significant  results with less cost," he said.

In the framework of the assignment of the Prime Minister of Armenia,  as the head of the Committee noted, at this stage there are 11  ready-made projects on construction of small water reservoirs in  Vayots Dzor, Syunik, Tavush and Armavir regions of Armenia. The total  budget will be $ 70mln and their implementation, according to Arsen  Harutyunyan, will become possible thanks to private investments.   "There is a process of discussion with potential investors for  attracting investments," he said.

Earlier, ArmInfo informed that in 2017 it is planned to complete  design works on restoration and completion of construction of the  Cape Reservoir on the Akhuryan River bordering Turkey. Already in  early 2018, a tender for the construction of a reservoir will be  announced. As a result of the construction of the Kaps reservoir,  which was suspended in 1994, it is planned to provide an additional  5,000 hectares of irrigation. The work, according to different  estimates, will last about 5 years.

To date, there are about 90 different reservoirs in Armenia and in  the next five years, judging by the government's plans, significant  progress is being made in this area. In total it is planned to build  4 large reservoirs. The new reservoir will appear in Vedi - 29  million cubic meters, Eghvard - 90 million cubic meters, the  reservoir Kaps - at the first stage of 25 million cubic meters, at  the second - up to 60 million, and also on the rivers Selav and  Mastara - 10 million cubic meters. All this will be carried out  within the framework of credit programs and program costs will amount  to about $ 350-400 million. Funding is mainly provided from credit  resources from international donors such as the Japan International  Cooperation Agency (JICA), the Eurasian Development Bank, the French  Development Agency, the German Development Agency bank KFW and  others.