Armenian government, KfW to extend loan programme 

ArmInfo.The Government of the Republic of Armenia and the German bank KfW will extend the  implementation of the program "Integrated management of water resources of the Akhuryan River" until December 30, 2026. At a meeting on June 20, the Cabinet of Ministers of Armenia approved the  signing of a letter of agreement with the Bank.

As noted in the rationale for the draft decision, the agreement on  the implementation of the program was signed in 2014. As of December  19, 2023, of the 50 million euros provided for in the loan agreement,  about 41.9 million euros are available for the construction of the  Kaps reservoir.  However, due to the high bid of 61.5 million euros  (excluding contingencies and taxes) received as part of the tender  for civil works for the construction of the Cape Reservoir and  auxiliary structures, in agreement with the German Federal Ministry  for Economic Cooperation and Development, it was decided to fill the  shortfall financing the construction of the reservoir with funds in  the amount of 17.4 million euros, and the rest of 2.2 million euros  will be covered by co-financing from the Government of the Republic  of Armenia. Construction is scheduled to be completed in the second  quarter of 2026, and several more months will be required for  testing, detection of defects, and paperwork.

The Kaps reservoir under construction is located in the Shirak  region, 22 km north of the city of Gyumri, in the valley of the  Akhuryan River.

The program, with a budget of 60 million euros (50 million euros loan  funds), is financed by the government of Armenia and the German bank  KfW. The loan agreement came into force on June 29, 2019, the  deadline for using the funds was set until December 30, 2019, but was  then extended until June 30, 2024. At the first stage of the  "Combined Water Resources Management/Akhuryan River, Stage 1"  program, it is planned to build a reservoir with a capacity of 25  million cubic meters of water.  

At the second stage it is planned to increase the cubic capacity to  60 million cubic meters. The project involves the construction of  auxiliary structures for the Cape Reservoir dam, equipping  hydrological observation points of the Akhuryan River (from the Arpi  reservoir to the Akhuryan reservoir), the construction of additional  stations, and the creation of a centralized database (SCADA system).   Completion of the construction of the dam and auxiliary structures  will primarily ensure the safety of settlements in the lower reaches  and increase the level of water supply to lands with an area of  12,325 hectares in the Shirak region and on the right bank of the  Akhuryan reservoir. 

It will be possible to replace mechanical irrigation of 2,280  hectares of land with gravity irrigation, which will save 1.3 million  kWh of electricity per year. As a result of regular irrigation,  agricultural production will increase, and the installation of a  reliable water metering system will improve the level of water  management and monitoring.