ARMENIAN GOVERNMENT TO PROVIDE 20BLN GUARANTEES FOR CONSTRUTION DEVELOPMENT

/ARKA/
April 13
YEREVAN

The task group formed at the Armenian Government decided to provide
government guarantees to the developers that carried out 20bln AMD
construction at the first stage.

"This new initiative by the task group is aimed to promote construction
in Armenia," stated RA Prime Minister Tigran Sargsyan. He said that the
construction sector is one of the most important engines of economic
development in Armenia. The domestic developers were the first to
feel the impacts of the global crisis because a sharp decrease in
foreign investments in the construction sector affected the GDP.

"The construction sector produces the most serious multiplicative
effect on the GDP structure, and the decrease in investments is of
essential importance for the entire economic system," he said.

The Premier pointed out that the government guarantees will enable
developers to attract bank credits.

"Banks have extremely sound liquidity and accumulated funds now. Risks
are the only factor keeping them from increasing crediting,"
T. Sargsyan said. He added that the Government cannot but interfere
and assume some of the risks to stimulate economy.

To take part in the contest for government guarantees on April 13,
all the developers can apply to the task group. The information on
the necessary documents is available on the=2 0RA Government’s website.

"We have held preliminary discussions with the developers, and the
Central Bank has held discussions with commercial banks. Our terms
are acceptable for both sides," T. Sargsyan said.

The Premier said that the Government gives priority to the construction
projects implemented 75%.

"We are doing it for new flats to be finished and put up for sale as
soon as possible," he said. T. Sargsyan pointed out that unencumbered
real estate is to be pledged as security for the repayment of the
government loans.

The Armenian Premier stressed that if the Government fails to implement
the 20bln AMD measures and assess the risks," we do not rule out that
the Government will add 20bln AMD more."

"So we hope that developer will promptly respond to our statement, and
we will be able to ensure large-scale crediting, which, in turn, will
improve the economic growth indicators," the Premier said.