Sisian-Kajaran section of North-South project planned to be completed  by end of 2031 

ArmInfo. On January 9, at its regular session, the Armenian government approved the draft law on ratification of the financial agreement between the Republic of Armenia and the European Investment Bank with a budget of 236 million euros.

ArmInfo reported earlier that in 2025, it is planned to begin  construction work on 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 works will be carried out in three sections: 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 2024 by  the Ministry of Territorial Administration and Infrastructure, the  construction of the three sections of the road section will require  708 million euros in credit funds. The southern section was 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 to finance 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  explanation to today's document, within the framework of the program,  an asphalt concrete road with a width of 11.1 m (including reinforced  shoulders), 3 traffic lanes (3.30 m), 27 bridges with a length of 4.7  km and 9 tunnels with a total length of 12.5 km will be built, the  longest of which is the Bargushat tunnel with a length of 8.6 km (the  tunnel section will be financed separately).

The funds provided by the document will be used to finance the  construction of the northern and southern sections of the  Sisian-Kajaran road. The project will also be co-financed by the  European Bank for Reconstruction and Development and the Asian  Development Bank, each in the amount of 236 million euros.

The contract also sets out requirements for mitigating environmental  and social impacts, the effects of climate change, as well as  measures to ensure road safety in accordance with EU directives.

The project is scheduled for completion by December 2033 (completion  of construction: December 2031, quality guarantee period: December  2033).

The amount of the loan provided is 236 million euros. The terms of  the loan 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 March 20 and September 20 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.

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.