The Armenian government announced on Thursday that the state-owned German development bank KfW will provide with a fresh 80 million-euro ($93 million) loan which will finance some of its budgetary expenditures.
A government statement said the low-interest loan repayable in 15 years will support government efforts to improve waste management and introduce a national system of agricultural insurance in Armenia. The statement did not give details of these projects.
Finance Minister Vartan Aramian also did not go into details as he presented a corresponding draft agreement with KfW to fellow cabinet members for approval. He said only that the “budgetary support loan” will be disbursed in two equal instalments this year and next year.
Agricultural insurance is increasingly seen as a vital necessity in Armenia where thousands of subsistence farmers lose their crops each year due to hailstorms, droughts and other natural disasters. Successive governments in Yerevan have blamed the absence of such a system on a lack of public and private funds.
Since 1998 KfW has financed hundreds of millions of dollars worth of projects in Armenia’s energy, finance, healthcare, real estate and water supply sectors. One of its major loans, worth 85 million euros, is being used for the construction of a new power transmission line that will connect Armenia to Georgia.
Together with the International Finance Corporation, KfW also lent private investors $9 million in 2014 for building a first-ever energy-efficient office complex in Yerevan. Its construction is nearing completion.