World Bank to allocate $75 million to Armenia

18:33, 19 November 2014

YEREVAN, NOVEMBER 19, ARMENPRESS: The World Bank will allocate $75 million budget loan to the Republic of Armenia. On November 19 the Minister of Finance of Armenia Gagik Khachatryan and the Director of the Armenian office of the World Bank Laura E. Bailey signed the loan agreement Second Development Policy Operation between the Republic of Armenia and the International Bank for Reconstruction and Development.

The Department for Mass Media and Public Relations of the Ministry of Finance of Armenia informed Armenpress that the loan is given with preferential terms for 25 years of repayment period.

Earlier it was reported that the World Bank Board of Executive Directors approved a US$75 million loan for the Second Development Policy Operation (DPO) for Armenia to support a wide range of reforms in the business environment, finance, civil service, social protection, public infrastructure and environment. This was the second in a series of three DPOs, supporting the Government of Armenia in meeting its strategic objectives, including stronger job creation, which is Armenia’s overarching development challenge.

“The Operation is designed to support economic growth and sustainability to help Armenia reduce poverty and promote shared prosperity,” says Laura E. Bailey, World Bank Country Manager for Armenia. “Creating jobs is critical here in Armenia. The program aims to achieve this through strengthening competitiveness and enhancing fiscal, social and environmental sustainability.”

The Operation supports reform measures implemented by the Government under five main objectives:

· Strengthening the business environment through reduction of inspections burdening businesses, as well as implementation of the “single window approach” for customs clearance of goods, and creation of a new institutional structure for the oversight of the aviation sector to increase transparency and improve accountability in the civil aviation field.

· Improving access to credit with measures to create a modern framework for secured transactions, which will allow the use of moveable assets as collateral for better access to credit.

· Improving efficiency and transparency of the civil service through strengthening of the performance evaluation system and broadening the use of e-government systems.

· Expanding social protection through extending the coverage of the waiver of co-payments in medical institutions to the households covered by Family Benefits Program.

· Improving fiscal space and the management of public infrastructure and environmental resources through reporting estimates of the revenue impacts of major tax expenditures, implementation of an Action Plan on Drinking Water Sector Reforms, including the decision to create a new, nationwide lease contract, and adoption of the Law on Environmental Impact Assessment along with operationalizing the “one-stop-shop (OSS)” for mining rights in line with environmental and social (E&S) guidelines.

“This development policy operation supports a package of reforms which will help the Armenian economy make the shift from an unsustainable reliance on inflows and the non-tradable sectors towards the tradable sectors and a higher rate of job creation,” says Ulrich Bartsch, World Bank Task Team Leader of the Project. “We are helping the Armenian government meet the challenges of reinvigorating the economy through enhancing competitiveness and sustainability.”

The Second DPO in the total amount of US$ 75 million is an IBRD flexible loan with variable spread with a 14.5-year grace period and repayment of over 25 years.

Since joining the World Bank in 1992 and IDA in 1993, the total IDA and IBRD commitments to Armenia amount to US$2,036,73 million.

World Bank to allocate $75 million to Armenia | ARMENPRESS Armenian News Agency

World Bank to allocate $75 million to Armenia

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