GOVERNMENT APPROVES $2 MILLION IN LOAN GUARANTEES TO AVO PRIVATE DEVELOPER

ARKA
Aug 27, 2009

YEREVAN, August 27, /ARKA/. The Armenian government has approved
today $2 million in loan guarantees to a private AVO developer to
finish construction of a residential building on Abovian street in
central Yerevan.

Finance minister Tigran Davtian said the private developer needs
the guarantees to seek a loan from Armbusinessbank to accomplish
the project.

The guarantees are given for a three year term. In return the company
will deposit the housing space under construction and the land plot.

Last April, the government approved 20 billion drams ($55 million)
in loan guarantees to private developers to help them complete
their housing projects. Five construction firms have reportedly
received such guarantees since then. Construction sector shrank by
55.5 percent in the seven months of this year, contributing to the
total GDP fall. According to the minister, the move is expected to
reinvigorate the sector that was the main driving force behind a
double-digit GDP growth in the previous six years.

Earlier this month, Urban Development Minister Vartan Vartanian said
the wide-ranging anti-crisis measures of the government would ease
the dramatic decline in the construction sector in the second half
of this year.

The government said also it will spend part of a $500 million
anti-crisis loan provided by Russia on housing construction in Arme
nia’s northern regions and another $33 million portion of the loan will
be channeled into a recently established state mortgage fund assigned
to provide relatively cheap housing loans to the population.
From: Baghdasarian