WORLD BANK AND ARMENIAN GOVERNMENT TO FINANCE IMPLEMENTATION OF THIRD PROGRAM OF SOCIAL INVESTMENT FUND IN ARMENIA

ArmInfo News Agency, Armenia
Nov 28 2006

The Armenian Parliament has ratified an agreement between the Armenian
Government and the World Bank on joint financing of the third program
of Social Investment Fund (ASIF III) worth $33.3 million.

Deputy Minister of Finance and Economy of Armenia Pavel Safaryan said
in the Parliament that the agreement was signed on November 1 2006
in Yerevan. The WB’s share in the program will total $25 million,
which is 75% of the total amount of the program. The co- financing
by Government of Armenia will total $6.7 million (20%). The share of
the local self-government in the program will make up $1.5 million of
4.7%. In addition, $0.16 million will be provided in terms of a grant.

The program aims to fill the "infrastructure gaps" and repair schools,
polyclinics and ambulance stations in villages. The investments will
be allocated to the poorest 300 communities (the third of the total
number of communities in RA). The assistance in the formation of the
community budgets is rendered in order to support the state policy of
power decentralization. P. Safaryan said the crediting terms of the
third program are tougher than those of the two previous ones. It is
for the first time that the WB gives a credit to Armenia on conditions
of the International Bank of Reconstruction and Development (IBRD) for
20 years under 0,75% annual interest and 10 years of grace period. All
the remaining credits were provided on conditions of the International
Development Association (IDA) for 40 years.

The terms were changed due to the growth of GDP income per capita in
the Republic, P. Safaryan said. While earlier the Government’s share
in the co-financing was only 3.5%, now it has rose to 20%. The funds
allocated under the given program are subject to taxation unlike
other programs. The first credit in the scope of this Program worth
$12 million was granted in November, 1995, the second one worth $20
million in May, 2000.

To note, Armenia has received credits from WB to the total sum of
$952,25 mln since 1992 for implementation of 44 programs.
From: Baghdasarian