ArmInfo.As part of a joint budget assistance program based on the Fiscal Stability and Financial Markets Development Program Policy, two loan agreements were signed yesterday at the Finance Ministry of Armenia: a 100mln Euro loan agreement between Armenia and the French Development Agency (AFD) (two-tier) and a 100mln US dollar loan agreement between Armenia and the Asian Development Bank.
Armenia's Parliament on Friday ratified the government-submitted draft agreements.
According to RA Deputy Minister of Finance Vahe Hovhannisyan, both documents were signed on November 17, 2022. The loan funds will be used to finance the 2022 state budget deficit. For this reason, the timely receipt of credit funds is of great importance in terms of financing the costs provided for by the state budget of the country. The implementation of measures and reforms in a number of areas is a prerequisite for obtaining budget support funds. The program, in particular, provides for improving the efficiency of fiscal planning, transparency, public spending, risk management, as well as reforming the public investment system, including the public-private partnership system, modernizing the public procurement system, developing a "green" economy policy, strengthening adaptation to climate change and expanding the use of "green" financial instruments, improving the system of public debt management, developing capital markets, increasing corporate transparency by revising the regulatory framework for accounting and financial regulation. The program is designed for two years, which implies its continuation in the next financial year.
According to RA Deputy Minister of Finance Vahe, the Deputy Minister also said that the loan funds were provided with a floating interest rate with a margin of SOFR + 0.6%. The term of the loan agreement is 12 years, 3 of which are preferential, which is in line with agreements with the International Monetary Fund, according to which the borrowed funds must include at least a 30% grant element.
