Government Sees New Western Loans for Infrastructure Projects

YEREVAN (RFE/RL)–The Armenian government said on Tuesday Western donors have pledged to provide some $180 million worth of new loans for its five-year plan to rebuild and modernize Armenia’s aging water infrastructure. The $200 million plan approved by the government last May envisages massive capital investmen’s designed to improve supplies of drinking water and the irrigation system across the country.

Senior government officials announced that they have reached a tentative agreement with the World Bank on the release of new low-interest loans totaling nearly $150 million over the next five years. Of that $65 million will be used for irrigation purposes. Another loan worth approximately 50 million German marks ($23 million) is due to be disbursed by the government of Germany–according to Finance and Economy Minister Vartan Khachatrian and the head of the State Committee for Water Resources–Gagik Martirosian.

"The implementation of this program in the next five years is realistic," Martirosian declared. He added that the government will have to issue over two dozen directives–enact three new laws and engage in other "active preparatory work" before the program’s official launch in the beginning of next year.

The two men made the announcement at a joint news conference that followed their visits to Berlin and Washington earlier this month. Khachatrian said under an agreement signed with senior World Bank officials the first $32 million tranche of the irrigation credit will be made available this autumn. The money will be spent on the construction of three new water mains and a dam on the Arax river marking the Armenian-Turkish border–he said.

The authorities hope that the new water-pipes in the Vayots Dzor–Armavir and Tavush provinces will boost local agriculture and significantly reduce the use of electricity at water pumping stations there.

Martirosian said that the decision to build the Arax dam has been agreed with the authorities in Turkey. He revealed that the governmen’s of the two neighboring states–which have no diplomatic relations–last February prolonged a 1983 Soviet-Turkish agreement providing for equal use of the river’s waters. Existing facilities allow Armenia to use only half of its quota of 53 cubic meters per second–he explained.

Some $88 million in expected World Bank loans are meant to improve supplies of drinking water in areas outside Yerevan. "I can assure that by early 2005 or late 2006 the overwhelming majority of cities–towns and villages will have around-the-clock supplies of water," Martirosian said.

Under a separate "community development" project launched last year–the World Bank agreed to provide the bulk of $30 million funds for Yerevan’s struggling water supplies and sewerage network. The Armenian government was supposed to contribute $5 to the project. But its failure to raise the money on time led the World Bank to delay the release of its $25 million loan.


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