ArmInfo. The French Development Agency (AFD) may open a €250 million credit line for Armenia. The signing of a corresponding agreement with the AFD is included in the agenda of the government meeting to be held on October 1.
The rationale for the draft decision notes that the credit line for Armenia will be opened for budget support purposes. It is the first subproject implemented under a new three-year program co-financed by the AfD and the Asian Development Bank (ADB), which is a continuation of previously implemented budget support programs based on government policy in the area of public financial management and financial market development. The main objectives of this program are aimed at ensuring responsible public financial management, facilitating high-quality and sustainable public spending and investment, Reducing the Republic of Armenia's dependence on external financing by strengthening domestic resource mobilization and creating a more favorable business environment.
The program has three main reform areas: improving fiscal and budgetary management, public finance management, and public service delivery at the national and subnational levels; creating an enabling environment for domestic resource mobilization, developing linkages and the private sector; and promoting sustainable financing by improving debt management and enhancing the efficiency of financial markets.
Budget support funds will be used to finance the deficit defined by the Law of the Republic of Armenia "On the State Budget of the Republic of Armenia for 2026." Therefore, timely disbursement of loan funds is crucial for financing expenditures under the state budget categories.
ADB will cofinance the program in the amount of up to $250 million. The loan amount will be disbursed in a single payment, with the borrower having the option of choosing a floating or fixed interest rate for each payment. A floating interest rate equal to the 6-month EURIBOR rate (or, in its absence, the corresponding base interest rate) plus a margin of 2.3%, which is fixed in the agreement. Taking into account the 6-month EURIBOR interest rate set on September 11, 2026, which is 2.820%, the floating interest rate on the loan will be 5.120%. A fixed interest rate may be fixed in the case of a loan application in the amount of 3 million euros or more. It cannot be less than 0.25%. At the same time, in each withdrawal application, the borrower may specify the maximum interest rate acceptable to him/her, and if the interest rate calculated on the interest rate determination date exceeds the maximum interest rate specified in the application, the application is considered canceled.
