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Armenia and ADB

ADB investments in Armenia will underpin higher economic growth, build on momentum for nonsovereign operations, and scale up technical assistance for knowledge work.

ADB's Work in Armenia

ADB Membership

Joined 2005

Shareholding and Voting Power

Number of shares held:
31,671 (0.298% of total shares)

70,785 (0.532% of total membership, 0.817% of total regional membership)

Overall capital subscription:
$456.15 million

Paid-in capital subscription:
$22.86 million

ADB has been affiliated with Armenia since 2005 and is one of the country’s largest multilateral development partners.

ADB’s support for Armenia targets inclusive, diversified, and transformative growth. It includes priority infrastructure investments in transport, energy, and urban development; assistance to reform service delivery in education, health, and financial services; and support for regional cooperation and integration.

Since 2005, ADB has committed 36 loans totaling $1.55 billion (including 23 sovereign loans amounting to $1.19 billion and 13 private sector loans and 1 equity financing facility amounting to $356.9 million) and technical assistance grants totaling $26.6 million, including ADB-administered cofinancing, for Armenia.

The Cafesjian Sculpture Garden is located at the base of the Cascade in Yerevan, Armenia. It is design to give a modern setting for large-scale sculptures.

Cumulative loan disbursements to Armenia amount to $1.19 billion. These were financed by regular and concessional ordinary capital resources. As a middle-income country, Armenia has access only to market-based ordinary capital resources.

ADB-Supported Projects and Programs

ADB’s active sovereign lending portfolio in Armenia totals $606.5 million for eight projects in transport, energy, and urban infrastructure and services, and one special assistance grant in health. About 80% of active sovereign loans are for transport projects.

In 2020, ADB approved a $2 million grant from the Asia Pacific Disaster Response Fund, financed by the Government of Japan, to support the Government of Armenia’s efforts to protect its people from the coronavirus disease (COVID-19). The bank also committed a $20 million nonsovereign loan to Electric Networks of Armenia to ensure vital supplies of electricity during the pandemic; approved $500,000 in regional technical assistance to procure personal protective equipment and other medical supplies; and approved technical assistance of $750,000 to ensure continuous quality education by developing and delivering a distance learning platform.

ADB’s investments in transport are helping develop an efficient, safe, and sustainable road network as well as improved domestic and cross-border connectivity for Armenia. The bank has approved $500 million for the North–South Road Corridor Investment Program multitranche financing facility and $400 million for the Sustainable Urban Development Investment Program multitranche financing facility. It has also committed about $50 million for the Armenia–Georgia Border Regional Road (M6 Vanadzor–Bagratashen) Improvement Project. By rehabilitating and upgrading 51.5 kilometers of the two-lane highway in northern Armenia, this project will enhance international connectivity, reduce the cost of transport, and improve road safety.

In response to Armenia’s exposure to natural disasters, ADB’s results-based loan of $88.5 million for the Seismic Safety Improvement Program continues to help strengthen 46 priority school buildings and improve the government’s seismic safety planning and management competencies.

The North-South Road Corridor Investment Program aims to achieve efficient, safe and sustainable north-south corridor linking the Republic of Armenia domestically and internationally.

ADB is also helping the government shore up Armenia’s energy security. The $37 million Power Transmission Rehabilitation Project is working to diversify energy sources while rehabilitating and upgrading electricity transmission and distribution networks.

In view of limited fiscal space for sovereign lending in Armenia, ADB has, in recent years, emphasized support for the country’s private sector. Its nonsovereign operations now cover utilities and infrastructure, financial institutions, and agribusiness. In 2020, ADB also approved a $15 million loan to Armeconombank to support lending to micro, small, and medium-sized enterprises in Armenia, with a specific focus on women and areas outside the capital, Yerevan.

Improving and strengthening of school no. 153 in Armenia under the Seismic Safety Improvement Program.

Nonsovereign Operations

As a catalyst for private investments, ADB provides financial assistance to nonsovereign projects and financial intermediaries. Total commitments in loans and equity investments from ADB’s own funds in 2020 amounted to $1.4 billion for 38 transactions in economic and social infrastructure, finance sector, and agribusiness. ADB also actively mobilizes cofinancing from commercial and concessional sources. In 2020, ADB mobilized $1.9 billion of long-term project cofinancing and $3.3 billion of cofinancing through its Trade and Supply Chain Finance Program and Microfinance Program. Total outstanding balances and commitments of nonsovereign transactions funded by ADB’s own resources stood at $14.3 billion as of 31 December 2020.

In 2020, commitments from ADB’s own funds amounted to $35 million for a COVID-19 working capital support project and a gender-inclusive lending to micro, small, and medium-sized enterprises project in Armenia. Total outstanding balances and commitments of ADB’s nonsovereign transactions in the country as of 31 December 2020 was $238.1 million, representing 2% of ADB’s total nonsovereign portfolio.

Financing Partnerships

Financing partnerships enable ADB’s financing partners, governments or their agencies, multilateral financing institutions, and commercial organizations to participate in financing ADB projects. The additional funds are provided in the form of loans and grants, technical assistance, and other nonsovereign cofinancing such as B loans, risk transfer arrangements, parallel loans and equity, guarantee cofinancing, and cofinancing for transactions under ADB’s Trade and Supply Chain Finance Program and Microfinance Program.

ADB began cofinancing operations in Armenia in 2009. Since then, sovereign cofinancing commitments for Armenia have amounted to $323.5 million for three investment projects and $4.31 million for six technical assistance projects. Non-sovereign cofinancing for Armenia has amounted to $ 399.72 million for six investment projects.

A summary of cofinanced projects is available at Armenia: Cofinancing.

Operational Challenges

The COVID-19 pandemic and the martial law implemented due to 6 weeks of military confrontation in September–November 2020 have resulted in a high undisbursed balance of capital expenditures and generated project implementation challenges in Armenia. In addition, the government’s borrowing capacity is constrained by a high level of public debt and high volumes of committed and undisbursed loan projects. For this reason, ADB envisages a flexible and adaptive approach to financing government needs. Where appropriate, sovereign lending will be structured to promote private sector participation, nonsovereign financing, public–private partnerships, and other innovative solutions.

Future Directions

In September 2020, ADB approved the country operations business plan, 2021–2023 for Armenia. The plan is consistent with the country partnership strategy, 2019–2023 and reflects the government’s preference for investment projects over the medium term.

Indicative resources for sovereign operations during 2021–2023 total $197.4 million. However, given the country’s debt situation, the total firm lending pipeline over the period is $160 million for selected priority projects. Further support to address the socioeconomic consequences of the COVID-19 pandemic may also be considered.

ADB investments will underpin higher economic growth, build on momentum for nonsovereign operations, and scale up technical assistance for knowledge work. The bank will continue to maximize synergies between sovereign and nonsovereign operations, with sovereign support leveraging private sector expertise and investments to enhance the effectiveness of public investments, strengthen services, and promote sustainability.

This article was originally published in the ADB and Armenia: Fact Sheet. Updated yearly, this ADB Fact Sheet provides concise information on ADB's operations in the country and contact information.

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