Key Takeaways

Since Armenia joined the Asian Development Bank (ADB) in 2005, the bank has partnered with the Government of Armenia to help the country pursue its development and reform priorities.

Despite challenges, the partnership has yielded substantial progress in sectors ranging from infrastructure development and human capital enhancement to knowledge support and regional cooperation and integration.

In this Q&A, ADB Country Director for Armenia Paolo Spantigati outlines the key achievements over the 17 years of the partnership and how ADB has been working closely with the Government of Armenia to achieve inclusive, diversified, and transformative growth. Mr. Spantigati took up his position in Armenia in late 2019 having served immediately before in the ADB Timor-Leste office.

1. How does ADB support Armenia to help achieve its development priorities?

Armenia, a landlocked country in the Caucasus region with limited natural resources, became an upper middle-income country in 2018. Despite marked progress since 2005, the country faces several development challenges including an economy that is heavily dependent on commodities, persistent poverty, and women’s lack of labor force participation.

Armenia joined ADB in 2005 and we’ve since been helping the country diversify its economy and increase opportunities for Armenians to benefit from growth. Over the 17 years of our partnership, ADB has become one of Armenia’s largest development partners, supporting the government’s priorities in transport, public sector management, finance, energy, water, and other urban infrastructure. We’ve also supported the development of social services.

Since 2005, ADB has approved 37 projects worth more than $1.6 billion. These include 23 sovereign loans amounting to about $1.2 billion, 13 non-sovereign loans and one equity financing facility for the private sector amounting to around $446 million. ADB has also provided 47 technical assistance grants totaling $25.5 million. ADB’s current active sovereign lending portfolio in Armenia totals just under $600 million for seven projects – most of which are in transport, but also energy, and urban infrastructure and services.

Our support to Armenia is aligned with the country’s development priorities including the Transformation Strategy 2050 that targets competitiveness and inclusiveness and aims to maximize exports.

ADB financed projects have helped diversify energy sources while rehabilitating and upgrading electricity transmission and distribution networks in Armenia.

2. What have been ADB’s key achievements since 2005?

Our investments have helped develop an efficient, safe, and sustainable road network, and improved domestic and cross-border connectivity in Armenia. As a result, over 260 kilometers of rural roads have been rehabilitated linking 75,000 people to Yerevan and regional cities.

In response to Armenia’s exposure to natural hazards, ADB has helped to strengthen 46 priority school buildings against earthquake risks, benefiting about 58,700 students, teachers, and other school staff. The support also helped improve the government’s seismic safety planning and management competencies.

We have also been supporting the Ministry of Finance, implementing reforms to strengthen Armenia’s public debt and fiscal management, enhance fiscal transparency and increase the depth of financial markets in Armenia.

In the energy sector, ADB has been helping the government shore up Armenia’s energy security. ADB financed projects have helped diversify energy sources while rehabilitating and upgrading electricity transmission and distribution networks.

We’re working with partners to establish a national standardized spatial data infrastructure for Armenia. This will help the country develop state of the art national geospatial data standards to empower effective land management, enable economic activities, and increase Armenia’s e-government capacity.

In summary, our work is helping to diversify the economy and improve the lives of Armenians.

3. How does ADB support the private sector in Armenia?

Given Armenia’s limited fiscal space, ADB has been supporting the private sector to contribute to the country’s economic growth and development priorities. ADB was one of the largest international financiers of Armenia’s private sector between 2017 and 2020, with operations covering utilities and infrastructure, financial institutions, and agribusiness. In 2021, ADB approved $35 million for the Phase 2 of Electric Networks of Armenia Investment Program to modernize electricity distribution networks to ensure reliable electricity supply in Armenia, especially in provinces.

4. What are ADB’s priorities for Armenia in the coming years?

Under ADB’s country partnership strategy (CPS) for Armenia, 2019–2023, our sovereign and nonsovereign operations focus on investments in priority infrastructure, improving essential public services in education, health and financial services, and encouraging greater regional cooperation and integration. ADB also supports strengthening institutional capacity and governance reforms.

We work closely with the Government of Armenia to ensure the sustainability of road network investments and expedite the implementation of ongoing transport projects. In the energy sector, we will support infrastructure upgrades and expand cross-border power interconnections which will help the production and export of electricity, diversify Armenia’s energy mix, and improve energy security.

To promote regional cooperation and integration, ADB will provide a combination of knowledge work and policy dialogue to support economic cooperation and cross-border infrastructure improvements. ADB will help to look for opportunities for greater regional integration, building on institutional and infrastructure investments and helping leverage the country’s position as a member of the Eurasian Economic Union and signatory to the Comprehensive and Enhanced Partnership Agreement with the European Union.

ADB will work to integrate gender into ADB’s operations in Armenia, including specific education curricula and health services designed to maximize access for women and girls. This will support the government’s efforts to reverse the low female labor force participation and improve school-to-work transition rates for girls.

ADB supports development of an efficient, safe, and sustainable road network, and improved domestic and cross-border connectivity in Armenia.

5. How has ADB supported Armenia through the COVID-19 pandemic?

ADB was among the first organizations to support the government’s efforts to protect its people from the coronavirus disease (COVID-19). In 2020, ADB approved a $2 million grant from Asia Pacific Disaster Response Fund, financed by the Government of Japan and an additional $500,000 as part of a regional technical assistance (TA) to help procure urgently needed medical supplies and personal protective equipment for Armenia.

To ensure quality and continuous education, ADB approved a $750,000 TA for Distance Education for Resilience, which will help develop and operationalize a distance education platform. ADB has also committed almost $35 million in COVID-19-related nonsovereign projects to help the recovery from the pandemic.

6. How do you see Armenia’s development prospects over the coming years?

I think the future of a prosperous, equitable and green Armenia is not far away. By continuously finding solutions and building adaptive capacity for uncertainties, and by strengthening partnerships that have already created positive changes in the Armenian people’s way of life in recent years, Armenia’s journey to that future will be successful. It will require rallying support not only from the Government but from all corners of society, including the private sector and other stakeholders. This will require commitment and support from all of us.

ADB stands ready to deepen our support for the Government of Armenia, build on our achievements and tackle the challenges that remain to advance a future that all Armenians aspire for.