YEREVAN — Armenia’s government gave on Thursday the green light for the relocation of an entire village as part of a $71 million project to build a new reservoir and irrigation system in northwestern Shirak province.

The Government gave a green light to the Action Plan for Acquisition and Resettlement of Lands under the Joint Water Resources Management/Akhuryan River, Phase 1 project.

On December 19, 2014 a loan agreement was signed between the Republic of Armenia and the Bank for Reconstruction and Development (KfW), which, in particular, envisages the implementation of the Construction of Kaps Reservoir and Gravity Irrigation System.

The half-built reservoir is located in Shirak region, in the Akhuryan river valley, 22 km north of Gyumri. The project includes the stabilization and rehabilitation of the Kaps dam, the construction of a reservoir with a volume of 25 million cubic meters in the first stage, with the possibility of further expansion up to 60 million cubic meters.

The construction of the Kaps reservoir on the Akhurian river had begun in Soviet times but stopped after the catastrophic 1988 earthquake that devastated many local communities and the provincial capital Gyumri in particular.

Armenia’s former government decided to revive and complete the project. Germany’s state-run development bank KfW agreed to lend it 50 million euros ($59 million) for that purpose in 2014. The government pledged to provide the remaining 10 million euros needed for building the irrigation facilities.

Prime Minister Nikol Pashinyan’s cabinet has also been committed to the project designed to improve supplies of irrigation water to farmers in Shirak.

It approved on Thursday a plan to relocate Jradzor, a village 22 kilometers north of Gyumri which would be fully or partly submerged by the Kaps reservoir. Jradzor’s 350 or so residents are to be resettled in a new village that will be built from scratch several hundred meters away.

The plan commits the government to providing all of them with new and free housing. This will cost the state an estimated 4.9 billion drams ($10 million), according to Vache Terterian, a deputy minister for local government.

The Jradzor mayor, Gevorg Hovakyan, and several other local residents interviewed by RFE/RL’s Armenian service said they look forward to the relocation. The impoverished village was severely damaged by the 1988 earthquake and never completely rebuilt.

Terteryan told Pashinyan and cabinet members that work on the new village will likely start next year and be completed by 2024. He gave no time frames for the construction of the reservoir itself.

Pashinyan stressed the strategic significance of these and other irrigation dams planned or already built in Armenia. “Approximately 7 billion cubic meters of water originates in the territory of Armenia every year,” he said. “But we can now manage only a fraction of these resources: around 10-15 percent. We must be able to achieve much more serious strategic objectives in this area.”

According to Deputy Minister of Territorial Administration and Infrastructure Vache Terteryan, the resettlement of Jradzor should be done in parallel with the implementation of the first stage with state funds. More than 72 households, about 350 inhabitants will be able to relocate to a new place. Residents of Jradzor are inclined to complete resettlement, which, according to preliminary estimates, amounts to 4.9 billion drams.

“The new village should have a modern design, separate livestock and residential areas. We will have a new type of settlement, which will harmoniously complement the tourism potential of the region, ”said Vache Terteryan.

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