An investment fund set up recently by more than three dozen Russian businesspeople of Armenian descent will finance nearly $300 million worth of business projects in Armenia this year, officials in Yerevan said on Thursday.
The Armenian government approved a corresponding “memorandum of understanding” with the fund called the Investors Club of Armenia (ICA) at its weekly session chaired by Prime Minister Karen Karapetian.
The wealthy entrepreneurs, among them the Armenian-born billionaire Samvel Karapetian (no relation to Karen), announced the launch of the ICA in Yerevan on March 25. The tycoon heaped praise on the prime minister during that ceremony.
An Armenian government statement said afterwards that the ICA will invest in new and existing Armenian companies in the form of loans or equity purchases. It did not give any numbers.
“They will discuss projects deemed of high priority by the government and make around $300 million worth of investments,” Minister for Economic Development and Investments Suren Karayan told reporters after Thursday’s cabinet meeting.
“After this memorandum of understanding is signed, we will present an investment package and they will discuss it,” he said. He did not elaborate on the business projects, saying only that the ICA investments in 2017 will mainly be channeled into the energy, mining and manufacturing sectors.
Prime Minister Karapetian again stressed the importance of the investment fund when he spoke at the meeting. “The fund will not only help to attract investments but will also bring a new business culture,” he told ministers. “The members of the fund are quite renowned and successful businessmen who have wide connections and many partners in various countries. They will serve as a bridge between our country and the business communities of those countries.”
Foreign direct investment in the Armenian economy has rapidly declined in recent years. Government data shows that it stood at a modest $130 million in 2016.
In Karayan’s words, the money promised by the ICA is part of some $850 million in investments which the government has pledged to attract this year. The minister reaffirmed that pledge.
“There are private investors that have shown an interest in investing here and they have already started investing,” Karayan said, adding that they include businesspeople from Armenia, Diaspora Armenians as well as non-Armenian foreigners. He did not name any concrete investment source other than the ICA, however.
Karapetian repeatedly stated earlier that that his government has all but secured $3.2 billion in funding for around 350 nationwide investment projects to be implemented in the coming years. Critics of his government are highly skeptical about that.
Armenia’s entire Gross Domestic Product is equivalent to less than $11 billion.