ADB Supports Road and Water Sector Sustainability in Armenia

News Release | 28 August 2014

MANILA, PHILIPPINES – The Asian Development Bank (ADB) approved a $49 million loan and a technical assistance grant of $900,000 to support the sustainability of Armenia’s road and water sectors, which have deteriorated due to limited investments and challenges in the public management systems.

Armenia, a landlocked country, has a 7,700-km road network, much of which is substandard due to low investment and a lack of maintenance expertise. Efficient management of the road network is also hampered by a fragmented system of over 500 national, regional, and local managers who often have different capabilities and capacities. The country’s water services network is similarly challenged. Despite recent improvements, half the system needs upgrading and many rural residents lack access to clean piped water.

“The program will promote more efficient service delivery in the road and drinking water sectors in Armenia through a clearer focus on results, and joint work on more effective and timely ways to achieve them,” said Yesim Elhan-Kayalar, ADB Principal Public Management Specialist. A unique feature of the program is blending the expertise and resources of government planning, finance, and sector agencies with civil society, user groups, and development partners. Together, all groups will help ensure a realistic course of action to address Armenia’s development needs in the road and drinking water sectors.

The program will produce a more integrated approach to road and water management with deeper reforms in both sectors. It has been designed in close coordination with the program beneficiaries and other development partners including the European Union, GIZ, KfW, IMF, and the World Bank to optimize synergies and support common development targets.

ADB’s Infrastructure Sustainability Support Program loan will be disbursed in two tranches subject to agreed-upon tranche release conditions. The $20 million first tranche will be released when the loan becomes effective and the second tranche is planned for 2015. The technical assistance will complement the loan by improving capacity and ensuring effective and timely implementation of policy reforms.