Wednesday, May 15 2024 15:21

ArmInfo. The European Bank for Reconstruction and Development (EBRD) is lending EUR 236 million to  Armenia to finance the construction of the southern section of the Sisian-Kajaran road.  

This is the largest road infrastructure project ever financed by the  EBRD in Armenia. This was stated by Bank President Odile Renaud-Basso  at the 33rd Annual Meeting of the EBRD in Yerevan.

As the Bank's press service reports, It was previously complemented  by technical cooperation funding generously provided by the European  Union (EU). These funds were used to undertake the feasibility study  as well as the environmental and social impact assessment. 

The loan agreement was signed today by the Minister of Finance of  Armenia, Vahe Hovhannisyan, and EBRD Managing Director, Sustainable  Infrastructure Group, Nandita Parshad during the EBRD Annual Meeting  and Business Forum in Yerevan. The signing took place before the  Armenia Investment Outlook session, in front of more than 200  official guests. 

The funding will allow the Government of Armenia to build 24  kilometres of a new southern road section between Sisian and Kajaran,  which is part of the North- South Road Corridor. The new road will  enhance Armenia's local, regional, and international connectivity,  and the country's access to international markets via the Black Sea.  This important infrastructure project is aligned with EU flagship  initiatives for improved land transport connectivity and building  resilience in the southern regions of Armenia. The EBRD actively  supports the EU Global Gateway strategy. The road will also enhance  local and inter-regional connectivity by providing a faster and safer  connection between the Syunik region and Yerevan, reducing the travel  distance and time by half.  

As Armenia is landlocked, solid road infrastructure is crucial for an  efficient flow of trade that can support the value chain, increase  diversification and accelerate the growth of the private sector and  the economy as a whole.

EBRD Managing Director, Sustainable Infrastructure Group, Nandita  Parshad said: "We appreciate Armenia's aspiration to develop a  transport and logistics infrastructure that will enhance its regional  connectivity and integration with external markets. We support this  project because it meets our strategic objectives in Armenia and the  region. We are also grateful to our partner, the European Union,  which provided technical cooperation support to ease the  implementation of this important initiative."

The EBRD is one of the largest institutional financiers in Armenia.  For the past five years the Bank has invested EUR640 million in the  country, supporting private sector development, infrastructure  enhancement, renewable energy generation and rural digitalisation.   To date, the EBRD has invested over EUR 2.1 billion in 211 projects  across Armenia.  Notably, that the new 60-kilometer Sisian-Kajaran  road, which will be of the second technical category, will pass  through difficult mountainous terrain and will include 27 bridges  with a total length of 4.7 km and 9 tunnels with a total length of  12.5 km (the longest is Bargushat tunnel, approximately 8.6 km long).  From the total package of financial assistance from the EU to Armenia  in the amount of 2.6 billion euros, 600 million euros will be  allocated for the construction of the Kajaran-Sisian road in the next  five years. Another $150 million will be provided by the Eurasian  Fund for Stabilization and Development.

The "North-South Road Corridor Investment Program" is a major  infrastructure project in Armenia which aims at reducing the distance  from the Iranian border to the Georgian one from 556 to 490  kilometers. The road will significantly facilitate access to the  Black Sea not only for Armenia, but also for Iran. The project will  provide access to the Black Sea and European countries through the  territory of Armenia  (Meghri-Kapan-Goris-Yerevan-Ashtarak-Gyumri-Bavra) and Georgia.   Construction of the corridor was originally scheduled to be completed  in 2019. The cost of the program was constantly revised upward.  Meanwhile, in September 2012, when construction of the highway began,  the amount quoted by representatives of the Armenian government was  several times less - $962 million.