Armenia to Assume Artsakh’s Debt Obligations – Finance Ministry

YEREVAN — The Armenian Ministry of Finance has developed a plan to settle obligations of the government of the Nagorno-Karabakh Republic (NKR) and other NKR borrowers to Armenian financial institutions, which arose, among other things, during the 44-day war in Artsakh.

The total amount of these liabilities is estimated at 315 billion drams. Finance Minister Vahe Hovhannisyan said that the debts will be restructured and the government will assume 70% of Artsakh’s loans, while the remaining 30% will become liabilities of financial institutions.

Armenia will issue 10-year treasury bonds to repay the assumed liabilities, which amount to 210 billion drams.

Hovhannisyan noted that the maximum amount of the bonds issue is 225 billion drams. The minister specified that these actions will affect the debt-to-GDP ratio, which will increase by 2.4% and will reach 49.4%.

At the same time, he specified that the right of claim for the loans granted by the Artsakh government will be transferred to Armenia. The minister said that an investigation will be conducted, and if flagrant cases are revealed when the funds were spent inappropriately, the government will seek their return.

Hovhannisyan also noted that the plan will also apply to loans given to individual citizens. In particular, about 14 billion drams were provided as mortgage loans.

He specified that the plan will not apply to loans taken without collateral, as well as to loans taken for purchasing housing or conducting business activities in the territory of Armenia.