Armenia and EDB to revise terms of investment loan provided for  construction of North-South road corridor

ArmInfo. Armenia and the Eurasian Development Bank will revise the terms of the investment loan provided for the construction of the North-South road corridor.  At the meeting on September 24, the RA government considered it  expedient to conclude a third supplementary agreement between the RA  and the EDB.

As noted in the substantiation of the draft decision, on April 14,  2015, the Eurasian Development Bank and the Republic of Armenia  signed an agreement on an investment loan from the Eurasian Fund for  Stabilization and Development in the amount of $ 150 million to  finance the construction of the southern section of the North-South  highway (Tranche-4), in according to which the loan is repayable from  June 30, 2020 to December 30, 2034 in 30 equal semi-annual payments  of $ 5 million each. However, as of February 29, 2020, only $ 0.65  million was paid out of the loan amount (or 0.4% of the total amount  loan), so it was necessary to revise the loan repayment schedule. The  issue was referred to the Yerevan office of the Eurasian Development  Bank, and it was proposed to revise the repayment schedule of the  principal amount stipulated in the agreement, applying the schedule  of proportional repayment of the already used part of the loan. The  proposal was accepted by the EDB, on the basis of which the latter  presented an additional agreement to the agreement on an investment  loan of the Eurasian Fund for Stabilization and Development. The  proposed option is in line with the mechanisms used by other  international financial institutions for repayment of the loan  principal, which makes the loan repayment process more flexible.

To recall, on August 25-28, a long-term mission of the Eurasian Fund  for Stabilization and Development took place, during which they  discussed the construction of the Kajaran-Agarak section as part of  the 4th tranche of the investment program of the North-South road  corridor. The construction of this section is financed by the  Eurasian Fund for Stabilization and Development from the accounts of  the Eurasian Development Bank. The road section is being designed by  the Italian company IDR Engineering and GP Engineering. Within the  framework of the mission, it was recorded that the design work is  continuing:  geodetic and geological surveys are being carried out.  The draft design will be presented to the customer in November of  this year. Together with the preliminary design of the road section,  a draft plan for land acquisition and resettlement will be presented,  which will be finalized based on the results of the final design. To  note, the North-South project will reduce the distance from the  Iranian border to the Georgian border from 556 to 490 kilometers. It  will significantly facilitate access to the Black Sea not only for  Armenia, but also for Iran. The project is initially funded with a  loan from the Asian Development Bank. A corresponding agreement with  ADB on the provision of half a billion dollars was signed by the  Armenian government in September 2009. Subsequently, the EFSD joined  the project, agreeing to provide $ 150 million. It was envisaged that  the construction of the highway would be completed by 2016, but so  far only part of the work has been completed. In general, according  to various estimates, the project is estimated at $ 2 billion,  although it was originally planned to spend $ 980 million on its   implementation.