Thursday, August 8 2024 13:22

ArmInfo. The International Bank for Reconstruction and Development, a member of the World Bank Group, will provide Armenia with a loan of 92.3 million euros, with another $16 million in grant money provided by the Global Concessional Financing Facility (GCFF).  The draft law "On ratification of the agreement between the Government of the Republic of Armenia and the IBRD" was approved at a Cabinet meeting on August 8.

As noted in the justification of the draft law, the budget support funds will be used to finance the state budget deficit. Timely receipt of loan funds is of great importance in terms of financing the expenses envisaged by the state budget. The implementation of the measures and reforms defined by the bilaterally agreed actions is a  prerequisite for receiving budget support funds. The scope of the project, in particular, includes promoting climate change mitigation and adaptation, as well as improving the regulatory framework for environmental management. It is also planned to carry out measures to strengthen equality and develop human capital, improve the effectiveness of the fight against corruption and the justice sector.  At the same time, the financing agreement for the "Second Green, Sustainable and Inclusive Development Policy Operation" signed between the Republic of Armenia and the International Bank for Reconstruction and Development on May 23 and 22, 2024, creates additional financial obligations for the state budget of the Republic of Armenia.

The decision to provide the loan was made by the World Bank's Board of Executive Directors on April 25, 2024. The funds will be used to promote green, sustainable, and inclusive development. "This development policy operation supports a package of reforms aimed at improving social equality, strengthening human capital, supporting the development of stronger institutions, and promoting climate change mitigation and adaptation in Armenia," said Caroline Geghinat, World Bank Country Director for Armenia.

Let us recall that since the beginning of its operations in Armenia in 1992, the World Bank has provided Armenia with about $2.7 billion from the IBRD, the International Development Association (IDA), and various trust funds. Armenia became a member of IDA in 2023.

GCFF is a financial intermediary fund established in 2016 to provide concessional financing to middle- income countries. GCFF contributions to Armenia under this operation were provided by the governments of the Netherlands and the United States of America.