BOARD OF MILLENNIUM CHALLENGES CORPORATION DECIDES NOT TO RESUME FINANCING OF RURAL REHABILITATION PROGRAM IN ARMENIA

ARKA
March 25, 2009

YEREVAN, March 25. /ARKA/. Board of Millennium Challenges Corporation
decided not to resume financing of rural rehabilitation program
in Armenia, Executive Director of Millennium Challenges – Armenia
Foundation Ara Hovsepyan reported.

Yet, the Board of the Corporation allowed Armenian Government providing
funds for the program, he told journalists Friday.

After the post-election development in Armenia in March 2008 having
led to clashes between the opposition and the Police and ten deaths,
Millennium Challenges Corporation refused to allocate the funds for
road construction scheduled for the spring last year. In response to
this, Armenian Government allocated 16.8mln dollars from its own funds.

The official website of the Corporation says that the Board confirmed
its concerns over the state of democratic development in Armenia at
its meeting of March 11 2009.

Yet, this measure taken by the Corporation does not apply to the
project "From water to market" on the All the remaining components
of the program will get further financing, he said.

Hovsepyan also reported that the Board of the Corporation decided to
hold another meeting on the issue by June.

This means that in March-April the program can be financed only from
government funds, Hovsepyan said.

Hovsepyan said that in early May the Foundation is to submit
a special application to the Corporation for provision of 4.8mln
dollars for June.

According to estimates, total cost of the program on rural road
reconstruction is 60mln dollars.

The program of the American "Millennium Challenges" Corporation started
in Armenia on September 29 2006. Under the agreement signed on March
27 2006 the Armenian Government is to receive a grant for $235mln
during five years. The grant means are to be used for reduction of
rural poverty in Armenia, rehabilitation of rural roads and irrigation
systems.