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Armenia and ADB

ADB's country partnership strategy for Armenia will encourage technological modernization and innovation, an improved business environment, private sector investment, and inclusive growth.

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:
$437.96 million

Paid-in capital subscription:
$21.95 million

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

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.

ADB’s country partnership strategy (CPS), 2019–2023 for Armenia targets inclusive, diversified, and transformative growth. It outlines sovereign and nonsovereign financing for priority infrastructure investments in transport, energy, and urban development; knowledge and policy assistance to help reform service delivery in education, health, and financial services; and support for regional cooperation and integration. The CPS is in line with Armenia’s national development program for 2019–2023, which aims to create an export-oriented economy meeting high technological, industrial, and environmental standards. The strategic objectives and the program of the CPS are also aligned with the Government of Armenia’s planned pivot toward borrowing for increased capital expenditure.

Since 2005, ADB has committed 32 loans totaling $1.48 billion (including 10 private sector loans amounting to $291.86 million) and 34 technical assistance grants ADB’s country partnership strategy for Armenia targets inclusive, diversified, and transformative growth by prioritizing infrastructure investments; reforms in service delivery; and regional cooperation and integration. Armenia totaling $20.6 million, including ADB-administered cofinancing. An equity investment of $30 million was also committed in 2018.

Cumulative loan disbursements to Armenia amount to $1.13 billion. These were financed by regular and concessional ordinary capital resources. Effective 1 January 2017, ADB reclassified Armenia as a middle-income country, with access only to market-based ordinary capital resources.

ADB-Supported Projects and Programs

ADB’s active sovereign lending portfolio in Armenia totals $648.0 million for nine projects in transport, energy, finance, health, and urban infrastructure and services.

In 2019, the bank committed a policybased loan of about $40 million for the Second Public Efficiency and Financial Markets Program, which builds on previous assistance to strengthen fiscal sustainability and develop financial and capital markets in the country. ADB also committed a $10 million policy-based loan for the Human Development Enhancement Program, its first social sector program in Armenia. The program will help improve the quality and coverage of services in education and health by creating a conducive legal and regulatory environment to expand investment in human capital. This will be tested by results-based programs across 2020–2022.

ADB is helping develop an efficient, safe, and sustainable road network as well as improved domestic and cross-border connectivity for Armenia. It has approved $500 million for the North–South Road Corridor Investment Program and $400 million for the Sustainable Urban Development Investment Program. The bank 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.

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.

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

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.

ADB’s nonsovereign operations in Armenia cover utilities and infrastructure, financial institutions, and agribusiness. In 2019, the bank committed a financing facility of about $44.0 million for the construction and operation of a thermal power plant in Yerevan. The project will help diversify Armenia’s energy sources and boost efficiency by replacing aging generation assets with modern facilities. In 2018, ADB committed a $32 million loan to Spayka, an agribusiness and logistics company, for the development of advanced horticulture as part of an integrated supply chain to reach international markets. The investment has helped develop 30 hectares of climate-controlled greenhouses equipped with drip irrigation systems to produce tomatoes and bell peppers. Also in 2018, the bank committed its first equity investment in Armenia—$30 million to help expand Ameriabank’s lending to small and medium-sized enterprises.

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 from ADB’s own funds (in equity and direct loans) in 2019 amounted to $3.00 billion for 38 transactions in economic and social infrastructure, the finance sector, and agribusiness. ADB also actively mobilizes cofinancing from commercial and concessional sources. In 2019, ADB mobilized $3.28 billion of longterm cofinancing and $3.69 billion of cofinancing in trade finance, microfinance, and supply chain finance programs. Total outstanding balances and commitments of nonsovereign transactions funded by ADB’s own resources stood at $13.78 billion as of 31 December 2019.

Financing Partnerships

Financing partnerships enable ADB’s development 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 Finance Program and Supply Chain Finance Program.

ADB began cofinancing operations in Armenia in 2009. Since then, sovereign cofinancing commitments for Armenia have amounted to $323.50 million for three investment projects and $3.76 million for five technical assistance projects. Nonsovereign cofinancing for Armenia has amounted to $339.81 million for four investment projects.

Projects Cofinanced, 1 January 2014–31 December 2018

Operational Challenges

Armenia’s high levels of public debt, its volume of undisbursed loan projects committed by the government, and its medium-term fiscal consolidation process all affect the government’s borrowing capacity and ADB’s portfolio performance.

For this reason, the CPS 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 November 2019, ADB approved the country operations business plan, 2020–2022 for Armenia. The plan is consistent with the CPS and reflects the government’s preference for investment projects over the medium term.

The indicative resources available for sovereign operations during 2020–2022 total $670 million. However, given the country’s debt situation, the firm lending pipeline over the period is $235.0 million for selected priority projects.

The operations business plan outlines ADB investments that will underpin higher growth, build on the momentum for nonsovereign operations, and scale up technical assistance for knowledge work.

An expanded nonsovereign portfolio and financing for social sectors will transform ADB’s relationship with Armenia to one appropriate for a growing middle-income economy.

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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