WB to issue EUR 70.4mln to Armenia for improving water-supply and  irrigation services

ArmInfo.  On December 11, the Armenian government approved a draft law ratifying the loan agreement 'Armenia Water Supply and Irrigation Services Enhancement Project:  Phase 1' (WISE) between the Republic of Armenia and the International  Bank for Reconstruction and Development (IBRD - the main lending arm  of the World Bank Group).

As stated in the explanatory note to the document, the Republic of  Armenia and the International Bank for Reconstruction and Development  (IBRD) signed the corresponding loan agreement on September 11 and  18, 2025.

According to the Agreement, the Bank will provide the Republic of  Armenia with ?70.4 million to finance the Project, and the Government  of the Republic of Armenia will co-finance taxes, duties, operating  expenses related to the Project, and other costs not eligible for  financing by the loan.

The Loan Agreement is valid for 180 days from the date of its  signing, and the Project is valid for five years from the effective  date. The effective date of the Co-financing Agreement is March 31,  2026.

The Project consists of the following main components: water sector  reform and institutional strengthening for climate-resilient  irrigation, rural water supply, and sanitation systems; improvement  of rural water supply and sanitation; modernization of irrigation  infrastructure and system management; and project management.

The project is also expected to be co-financed by the French  Development Agency (Agence Francaise de Developpement).

It is noted that given the multifaceted and interconnected nature of  the challenges facing the water sector in Armenia, including aging  irrigation infrastructure, limited access to safe water for the rural  population, and growing risks associated with climate change, the  proposed WISE project aims to apply an integrated, multi-phase  approach to ensure sustainable development and effective management  of the sector. The project is a logical continuation of previous  World Bank-financed initiatives and will ensure the implementation of  necessary policy, institutional, and infrastructure reforms.

The project is expected to result in the introduction of  climate-resilient irrigation and water supply systems, which will  contribute to economic growth, food security, and balanced regional  development.

In June, ArmInfo reported that the World Bank's Board of Directors  approved the first phase of a large- scale $435 million program aimed  at improving water supply and irrigation systems in rural and  underserved areas of Armenia. The program, scheduled for 2025-2031,  will be financed by a loan from the International Bank for  Reconstruction and Development (IBRD) equivalent to $80 million.  Co-financing will come from the French Development Agency (AfD), the  EU, and the Armenian government, totaling $185 million. Over the next  10 years, the total funding will amount to $435 million, the lion's  share ($330 million) of which will come from the IBRD.

"The program envisages comprehensive reforms of water resources  management enterprises. It encompasses the modernization of  irrigation systems and the expansion of reliable water supply in  selected rural communities," noted Caroline Guegenat, head of the WB  Yerevan office. According to her, infrastructure investments, coupled  with governance and policy reforms, will help Armenia address  challenges such as droughts, floods, and extreme heat. Overall, the  program will improve the quality of life and economic resilience of  rural communities.

The first six-year phase of the program will be implemented by the  Water Committee of the Ministry of Territorial Administration and  Infrastructure of the Republic of Armenia in settlements in the  Ararat, Armavir, Kotayk, Aragatsotn, Shirak, and Tavush regions. The  initiative aims to modernize infrastructure and strengthen  institutions regulating the water sector, in line with Armenia's  commitments to reduce greenhouse gas emissions and improve adaptation  to extreme weather events. According to the source, approximately  650,000 people in 579 rural settlements in Armenia remain without  access to centralized water services because they live in areas not  covered by lease agreements for water supply.

It was noted that the World Bank remains committed to supporting  Armenia's development, fighting poverty, and creating a more  sustainable and prosperous future. Since 1992, the World Bank has  provided approximately $3 billion to the country, including  investment loans, grants, analytical support, and technical  assistance. The current portfolio of the IBRD, trust funds, and the  International Development Association (IDA, a World Bank entity) is  approximately $400 million. Armenia also became an IDA donor country  in 2023.