Eurasian Stabilization Fund Extends $300-Million Loan to Armenia

YEREVAN (ARKA) — The Eurasian Stabilization Fund’s board has decided to extend a $300-million loan to Armenia, Russian Finance Minister Anton Siluanov told journalists in Yerevan on Tuesday.

On November 4, 2015, the Armenian government and the Eurasian Development Bank signed a $300-million loan agreement.

These financial resources are intended for neutralization of possible short-term and mid-term risks in implementing foreign exchange policy and for ensuring as fast economic growth as possible.

The loan is to be provided for 20 year with a ten-year grace period at a 2% annual interest rate.

“Today some loan agreements were discussed and it was decided to extend a budget-supporting loan to Armenia,” the minister said. “The first tranche will amount to $100 million.”

Siluanov said that the board also upheld a number of investment projects for irrigation systems and construction of a water reservoir with a credit line of $40 million.

It was decided to continue investment financing of infrastructural projects not only in Armenia, but also in Belarus and Tajikistan.

The Russian minister said that the Eurasian Stabilization Fund’s board will continue considering these issues with taking into account specification structural measures in these countries. It will also continue providing financial assistance after their implementation.

“Such an approach is an effective instrument for supporting reforms in these countries economies,” he said.

Armenian Finance Minister Gagik Khachatryan, on his side, said the stabilization financial resources to be provided to Armenia will be used for intended purpose.

He also stressed the importance of the ESF-approved project of construction of a water reservoir in Mastara for development of the country’s agriculture.

The Eurasian Stabilization Fund will lend another $40 million to Armenia for modernization of irrigation infrastructures. The total budget of this five-year project amounts to $50 million, of which $10 million will be provided by the Armenian government.

The loan is to be provided for 20 years with a ten-year grace period at a 2% annual interest rate. The project will be launched in 2016.

The Eurasian Stabilization Fund (earlier Eurasian Anti-Crisis Fund) was established by Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan in 2009.

The fund is run by the Eurasian Development Bank, which was established by Russia and Kazakhstan in January 2006 for supporting its member countries’ market economies, contributing to their sustainable growth and making economic and trade ties among these countries.