European Investment Bank committed to supporting projects improving lives of Armenian people, says Vice President Teresa Czerwińska

YEREVAN, NOVEMBER 19, ARMENPRESS. The European Investment Bank (EIB) has expressed its commitment to supporting projects that will improve the lives of Armenian people. The EIB’s priority sectors in the country are connectivity, energy efficiency, investments in skills and employment, integration of displaced people and support for private sector development.

Armenpress interviewed Vice-President of the EIB Teresa Czerwińska during her visit to Armenia.

Ms Czerwińska, first of all, could you please take us through the agenda and main purpose of your visit to Armenia, the important meetings you’ve had, and what agreements you’ve reached?

It is a pleasure to be in Armenia, a key partner for the European Union and for EIB Global, the global arm of the European Investment Bank (EIB). This is my first visit to Armenia as EIB Vice-President, and it has been extremely productive, marking important milestones in our ongoing and future operations in Armenia.

We signed the largest ever finance contract between the EIB and the Republic of Armenia for the Sisian-Kajaran road project. We’re supporting this project with a loan of up to €236 million. 

We are equally pleased to have signed an EU investment grant exceeding €10 million with the Republic of Armenia for the second phase of the Yerevan Energy Efficiency project. This EU grant will complement a €25 million EIB Global loan signed in November 2023. The municipality of Yerevan will use the funding to renovate over 100 000 m² of public buildings, focusing on reducing energy consumption and CO₂ emissions.  

During my visit, we also announced a financing package totalling €70 million from EIB Global and the European Commission that will support access to finance for thousands of businesses in Armenia. 

I also had the opportunity to meet Prime Minister Pashinyan, Deputy Prime Ministers Khachatryan and Grigoryan, Minister of Finance Hovhannisyan, Central Bank Governor Galstyan and Mayor Avinyan. We discussed our ongoing cooperation and future initiatives that we can pursue together.

A few days ago, the Armenian government approved a loan agreement with the EIB. That money will be used to build the Sisian-Kajaran road section of the North-South road corridor, which is important for Armenia. Did you discuss this agreement during your visit? How important is it for the Bank to finance projects like this?

The Sisian-Kajaran road is a crucial segment of the North-South transport corridor. As a co-financier with a substantial contribution of €236 million, the EIB recognises that this project will be a game-changer for Armenia and the South Caucasus region. It will significantly improve transport connections between the European Union, the Middle East and Asia.

This infrastructure will also support climate change mitigation by reducing travel distances and vehicle operating costs. As the climate bank, investing in climate resilience infrastructure is a key priority for us at the EIB.

Greater road safety is another key feature of the project, which will provide safer and faster routes for travellers and goods. It will also facilitate access to both domestic and international markets and contribute to the sustainable socioeconomic development of Syunik province.

This is a flagship project of the EU’s Global Gateway initiative and its Economic and Investment Plan for the Eastern Partnership. It will also be a key link in the Trans-European Transport Network corridor.

However, this is not the first road construction project the EIB has financed. The Sisian-Kajaran financing operation builds on a solid partnership with the Armenian Road Department. In fact, the third tranche of the North-South road corridor is almost complete. This operation is a good example of the Team Europe spirit, and the EIB has granted it a €60 million loan supported by a €12 million EU grant. We are also providing technical assistance to prepare the Gyumri bypass project under the EU-funded Facility for Eastern Partnership Investment in Connectivity (EPIC).

How does the Bank choose which projects to finance in Armenia, and which sectors does it prioritise? EIB loan agreements with Armenia’s commercial banks are mainly targeted at small and medium-sized businesses. Why does the Bank focus on these businesses – does it view the sector as one that could contribute to Armenia’s economic growth?

As the Bank of the European Union, owned by the Member States, EU policies guide everything we do. Our financing in Armenia is aligned with EU policy priorities outlined in the EU’s Global Gateway initiative and its Economic and Investment Plan for the Eastern Partnership. 

Expanding access to finance for Armenian MSMEs remains another key priority for the EIB and contributes directly to the EU’s goal of supporting 30 000 Armenian MSMEs under the Economic and Investment Plan.

Through direct loan agreements with three Armenian banks: Inecobank, ArmSwissBank and Farm Credit Armenia, we are lending a total of €58.5 million to expand credit for micro-, small and medium-sized enterprises (MSMEs) in the country. The European Commission is also contributing a grant of €11 million to help these banks meet growing demand for long-term local currency financing for Armenian MSMEs. 

During my visit, EIB with the Central Bank organised the EIB MSME Conference, a gathering of key stakeholders from financial institutions and the public and private sectors. This commitment builds on our efforts to increase financing for MSMEs, because they are the backbone of Armenia’s economy. 

Last summer, we established the first direct credit line to Armenian commercial banks by lending €55 million to ACBA Bank and €12 million to Evocabank. 

Since 2014, the EIB has provided four lines of credit to the Central Bank, a long-standing partner, for a total of €220 million – facilitating more than double that amount in investment into the economy. These funds, provided by the Central Bank of Armenia through local financial institutions, have supported over 350 projects for MSMEs and sustained over 2 000 jobs across the country. We have also provided technical assistance to maximise the effectiveness of the latest credit line. Funded by our distinguished donors under the Eastern Partnership Technical Assistance Trust Fund (EPTATF), the technical assistance helps ensure sound project implementation by addressing the needs of rural communities, focusing on women in business and fostering digitalisation. For their part, Greening Financial Systems (GFS) improve the quality of climate action projects in the country – which is particularly important for the EIB as the climate bank. 

According to the latest EIB MSME Survey, nearly 40% of small businesses in Armenia report that they lack the resources to invest in green technologies or digital solutions.  

In the face of pressures like digitalisation and sustainability, these constraints on access to finance are major concerns for MSMEs in every corner of the globe. Yet, while these challenges are tough, they also create opportunities – opportunities to innovate, grow and build resilience. The EIB Group is here to help the local private sector seize those opportunities. 

We are not just aware of these challenges; we are actively working to address them. Through our partnership with local financial institutions, we are helping to ensure that Armenian MSMEs have the resources they need to thrive, even in the face of these constraints. 

Ms Czerwińska, in which specific fields do you see the greatest potential and need for funding to promote Armenia’s economic growth? Are financing agreements aimed at these fields planned in the near future – and if so, can you say something about them?

The EIB’s priority sectors in the country are connectivity, energy efficiency, investments in skills and employment, integration of displaced people and support for private sector development. We are a demand-driven institution, and are happy to consider projects in both the public and the private sector that would benefit from our financing, meet our standards and pursue EU policy goals. We regularly discuss areas of cooperation with the government of Armenia and other relevant stakeholders. My visit is meant to show the EIB’s commitment to supporting projects that will improve the lives of Armenian people.

In 2023, the EIB donated €200 000 to UNICEF to support children and their families forcibly displaced from Nagorno Karabakh and resettled in Armenia. Does the Bank track the progress of the project, how many children have received support, or what needs the money has been used to meet? How do you assess the results?

In November 2023, the EIB Group – via its philanthropic arm, the EIB Institute – donated €200 000 towards meeting the mental health and winter-related needs of the children. 

Thanks to this donation, UNICEF has provided 26 000 children and their families with a psychological support and mental health helpline, face-to-face mental health and psychosocial support, and vouchers that helped them through the winter. The mental health helpline is staffed by 19 trained counsellors. The children and caregivers that wish to participate also receive psychological support through play therapy, art therapy and group sessions. This donation also supported refugee families with vouchers that helped cover essential needs last winter. The support was thus successfully mobilised in time to meet urgent needs on the ground.

What can you say about other important projects related to Armenia that are being planned?

We stand ready to further support projects in priority areas – connectivity, energy efficiency, investments in skills and employment, integration of displaced people and support for private sector development.