The French government will provide Armenia next week with an $82 million loan that will be used for refurbishing and expanding irrigation networks in the country’s rural areas.
According to the French Embassy in Yerevan, the French Development Agency (AFD) and the Armenian Finance Ministry will sign a relevant agreement January 26.
An embassy statement released on Thursday said the loan will directly benefit 4,500 households in the fruit-growing Ararat Valley south and west of the Armenian capital. The statement indicated that it will be mainly spent on the construction of a water reservoir near Vedi, a small town in the southern Ararat province. The facility will increase by 3,200 hectares the total area of arable land in the region covered by irrigation, it said.
The head of Armenia’s State Committee on Water Resources, Aram Harutiunian, stressed the “strategic” importance of the Vedi reservoir when he met with a senior AFD official in early December. He said that its construction will start in 2016 and take about five years.
Armenia’s Soviet-built irrigation networks have already absorbed considerable capital investments in the last several years. That includes a $177 million reconstruction of 6 major canals, 17 water pumping stations and the water drainage system of Ararat and neighboring Armavir provinces. It was financed by a U.S. government agency, the Millennium Challenge Corporation. The project was completed in 2011.
Later in 2011, the World Bank disbursed an $18 million loan for further irrigation upgrades in the country, which were due to benefit about 90,000 farmers. Nevertheless, a lack of irrigation water remains a serious problem hampering the development of the Armenian agricultural sector.
In 2015, the Armenian government secured two more irrigation credits, worth a combined $65 million, from the Moscow-based Eurasian Fund for Stabilization and Development and a lending arm of the OPEC group of oil-exporting nations.