ADB to fund construction of northern section of Sisian-Kajaran motor  way under North-South programme 

ArmInfo. Armenia will receive a loan from the Asian Development Bank (ADB) for a sustainable and inclusive road sector improvement project. The proposal to sign the relevant agreement was approved by the Cabinet of Ministers on  January 16. 

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 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. On January 9, at a  regular meeting, the draft law on ratification of the financial  agreement between the Republic of Armenia and the European Investment  Bank was approved. Sisian-Kajaran Road Section Program with a  budget of 236 million euros.

As stated in the explanatory note to the current document, the  objective of the project, co-financed under the loan agreement with  ADB for the Sustainable and Inclusive Economic Corridor Improvement  Project, is to assist the Republic of Armenia in the construction of  the northern section of the Sisian-Kajaran road.

Within the framework of the agreement, a 27.1 km long asphalt  concrete road with a surface resistant to climatic and catastrophic  impacts 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 current average speed of vehicles from 50 km / h  (to 100 km / h), and an increase in traffic comfort and safety.

The construction works on the road section include: construction of  an asphalt concrete road 11.1 m wide (including reinforced shoulders)  with 3 traffic lanes (3.30 m); construction of 3 tunnels, 16 bridges,  83 culverts, 28 retaining walls; performance of other works to ensure  road safety.

It is planned that the works will be carried out by introducing  construction methods that are resilient to climate change, green road  principles and best practices in operation and maintenance.

The construction of the road section will contribute to an increase  in trade turnover, a decrease in transport costs, the attraction of  transit transport and the development of tourism.

The Northern subdivision is planned to be implemented with  co-financing from the ADB and the EIB. The estimated volume of loan  funds for financing the project is 236 million. The project will also  be co- financed by the Republic of Armenia.

The terms of the loan are as follows: loan amount: 236 million euros;  project co-financing: a loan of 99 million euros provided by the EIB;  loan interest rate type: floating; annual interest rate on the loan:  6- month Euribor + 0.5% margin + 0.3% (repayment surcharge). The  commitment fee is 0.15% per annum, accrued on the unused loan amount,  the calculation starts from the 60th day from the date of signing the  agreement, paid semi-annually, simultaneously with the payment of  interest; loan term - 24.5 years; loan repayment term - 12.5 years,  grace period of the loan - 12 years. Deadline for issuing the loan:  06/30/2034.

The project is scheduled for completion by November 2033 (estimated  completion: November 2031, end of liability for defects: November  2033).

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