Armenia Secures $300 Million Loan for Transport Infrastructure and Budget Support
On 25 July, the Government of Armenia approved the signing of a loan agreement for the construction of the Kajaran Tunnel on the North-South Transport Corridor. The $200 million loan will be provided by the Eurasian Fund for Stabilisation and Development (EFSD). The 7 km long tunnel is planned for the southern section of the motorway, near the town of Kajaran, halfway between the Iranian border and Sisian in Syunik Province. In addition, access roads totalling 4 kilometres will be built from both the southern side (Meghri-Kajaran section) and the northern side (towards the future Kajaran-Sisian road).
The Kajaran tunnel is expected to significantly speed up and "straighten" the route from southern Armenia to the interior of the country, bypassing the many sharp turns currently required through the Bargushat range. At the same time, another section of the north-south motorway from Meghri (near the Armenian-Iranian border) to Kajaran is being built with a loan from the Eurasian Development Bank (EDB).
During the session, the Armenian government also approved an agreement to receive a $100 million loan from the Eurasian Development Bank (EDB) to address the budget deficit in 2024. The loan will be provided by the Eurasian Fund for Stabilisation and Development (EFSD), which is based in Moscow and has offices in all EAEU member states. The projected budget deficit for 2024 is about AMD 483 billion (about $1.24 billion at current exchange rates). Most of the deficit (almost 75%) will be covered by issuing government bonds, while the remaining 25% (about $340 million) will be covered by foreign loans, including the $100 million from the EDB.
The agreement includes a list of economic reforms drawn up by the Armenian government aimed at increasing business productivity and developing the local labour market.