Papikian said the promised grants and loans would be used for rebuilding roads in Armenia’s mountainous Syunik province leading to neighboring Iran.
The transport project is one of the European Commission’s five “flagship initiatives” for the South Caucasus country announced last week. They are worth a combined 1.6 billion euros and need to be approved by the EU’s 27 member states.
“The EU will use various instruments to support the implementation of this flagship in cooperation with the [international finance institutions]: grants, loans, guarantees, blending,” EU’s executive body said in a statement. It gave no details of the project.
Papikian said the money would be used for the planned reconstruction of Syunik highways stretching about 200 kilometers towards the Iranian border. The roadwork involving the construction of several mountain tunnels and bridges would cost an estimated $1.5 billion in funding, he told reporters.
“The European Union has promised the assistance and we now need to understand how, through what mechanisms and channels [it will be provided] before proceeding accordingly,” Papikian went on.
The minister stressed that the Armenian government, whose annual budget is worth less than $4 billion, would press ahead with the ambitious project with or without EU funding.
“We must do everything to call an international tender in August,” he said. “Now our task is to ascertain the financing sources so that the process can be accelerated.”
Iran has also expressed readiness to help upgrade the Syunik roads. Iranian Minister of Roads and Urban Development Mohammad Eslami discussed the matter with Papikian and other Armenian officials when he visited Yerevan in May.
The two sides agreed to set up a joint working group that will explore Iranian companies’ possible participation in the planned roadwork. The group held its first session in Tehran late last month and is scheduled to meet in Yerevan on August 15.
Syunik borders not only Iran but also Azerbaijan and its Nakhichevan exclave. Azerbaijani President Ilham Aliyev threatened earlier this year to forcibly open a “corridor” connecting Nakhichevan to the rest of Azerbaijan. Yerevan strongly condemned the threat.
Visiting Yerevan later in May, Iranian Foreign Minister Mohammad Zarif reiterated that the territorial integrity of Armenia and other regional states is a “red line” for the Islamic Republic.