Armenia to borrow EUR 50mln from OPEC Fund for International  Development

ArmInfo.Armenia plans to borrow EUR 50mln from the OPEC Fund for International Development.  Armenia's Parliament has ratified an agreement with the Fund. 

Presenting the document for ratification, Deputy Minister of Finance  of the Republic of Armenia Eduard Hakobyan noted that the funds  raised will be used to finance the 2023 state budget deficit. The  Deputy Minister noted that within the framework of the financial  assistance program adopted earlier by the National Assembly of the  Republic of Armenia, it was planned to attract a total of $350  million, however, taking into account the fact that capital  expenditures in the amount of 550 billion drams exceed the volume of  the state budget deficit of the current year in the amount of 290  billion drams, the resources attracted will be aimed at solving this  problem. In particular, we are talking about financing the capital  expenditure program, including the construction of schools,  kindergartens, healthcare facilities, roads, etc.

The Deputy Minister noted that loan agreements with the OPEC Fund  were signed on October 3 and 23, 2023. Interest repayments on the  loan will be based on six-month Libor and a fixed spread of 1.6%,  which is currently 5.6%. The funds are provided for a period of 20  years, of which the first five years will be preferential.

The project aims to promote green, sustainable and inclusive  development in Armenia by promoting climate change mitigation and  adaptation, improving environmental management and energy efficiency,  achieving greater levels of equality and promoting human capital  development, as well as strengthening governance.

Hakobyan recalled that the implementation of measures and reforms in  a number of areas defined by a bilaterally agreed table of political  actions is a prerequisite for receiving budget support funds. The  program is being implemented jointly with the World Bank, which  provided a loan of $100 million, so the scale of reforms is identical  to the table of policies of the loan agreement signed with the World  Bank on April 4 of this year.

The scope of the program reforms includes such components as  promoting climate change mitigation and adaptation, as well as  improving the regulatory framework for environmental management,  managing public investments, promoting energy efficiency, preserving  atmospheric air, assessing environmental impacts, strengthening  equity and promoting human capital development. The document also  establishes an increase in the targeting of the social support system  and the introduction of a new curriculum based on competencies aimed  at achieving learning outcomes. It is planned to increase the  effectiveness of the anti-corruption system and the justice sector.