EIB to provide EUR 236mln for construction of Sisian-Kajaran section  of North-South motorway

ArmInfo. On November 7, the Armenian government approved a proposal to sign a financial agreement  with the European Investment Bank (EIB) in the amount of 236 million euros within the framework of the program <Armenia. Sisian-Kajaran road section project <European Fund for Sustainable Development +  Special Investment Window 1>.

Earlier, ArmInfo reported that in 2025, it is planned to begin work  on the construction of a new road section with a length of about 60  km Sisian-Kajaran (including the Bargushat tunnel) of the 4th tranche  of the North-South road corridor. The work will be carried out in  three subsections: the northern section - 27.12 km long; the  Bargushat tunnel section, 8.65 km long and the southern section,  24.25 km long. In total, as noted in May of this year. According to  the Ministry of Territorial Administration and Infrastructure, 708  million euros of credit funds will be required for the construction  of three subdivisions of the road section. The southern subdivision  is planned to be implemented with joint financing from the EBRD and  the European Investment Bank (EIB). According to the initial plan  presented by the EBRD, the necessary credit funds for financing the  southern section amount to 373 million euros, of which 236 million  euros are planned to be attracted from the EBRD, and the remaining  137 million euros the RA authorities wanted to borrow from the EIB.

As stated in the explanatory note to today's document, within the  framework of the agreement with the EIB, asphalt concrete road  sections with a length of 27.1 km and 24.25 km will be built, which  will reduce the length of the Sisian-Kajaran road section, resulting  in a reduction in travel time, an increase in the average speed of  vehicles from 50 km/h to about 100 km/h, and an increase in traffic  comfort and safety. Road construction works on the northern and  southern sections include: construction of a 3-lane road with asphalt  concrete pavement, 8 tunnels, 27 bridges, 3 transport hubs, 151  culverts, 71 retaining walls (6.3 km), and other works ensuring safe  traffic.

The amount of the loan provided is 236 million euros. The terms of  provision are as follows: the term of use of funds is 5 years after  the entry into force of the agreement; the funds will be provided in  several tranches (maximum 20 tranches, not less than 5 million euros  each); the interest rate - fixed or floating - is set separately for  each tranche based on the Borrower's application. The floating  interest rate is equal to the 6-month EURIBOR rate plus a fixed  margin (the margin is fixed by the Bank in the installment offer).   Loan servicing payments (interest and principal repayment) will be  made semi-annually, on 20 March and 20 September of each year;  repayment period - each tranche will have its own repayment schedule  based on the Borrower's application. The loan repayment period may be  4-30 years, and the grace period - from 1 month to 5 years.

The project is scheduled to be completed by December 2033a (planned  completion of construction:  December 2031, termination of liability  for defects: December 2033).

<North-South> is one of the largest projects in the history of  independent Armenia. This road will reduce the distance from the  Iranian border to the Georgian border from 556 to 490 kilometers. The  road will significantly facilitate access to the Black Sea not only  for Armenia, but also for Iran. As of May 2024, the investment  program has been implemented by 10%, and the amount of loans  attracted as of the end of May 2024 amounted to $ 800.7 million.