WORLD BANK SUPPORTS COMMUNITY INVESTMENTS THAT TARGET THE POOR IN ARMENIA

The Financial
Feb 26 2010
Georgia

The FINANCIAL — The World Bank ‘s Board of Executive Directors on
February 25 approved a US$7 million credit for the Second Additional
Financing for the Social Investment Fund III (ASIF III) Project
for Armenia.

The Additional Financing will assist the Government of Armenia in its
efforts to improve the living standards of the poor and vulnerable
groups by expanding labor-intensive infrastructure projects.

According to World Bank , the Project will focus on "infrastructure
gaps", or schools, kindergartens, potable water pipelines, community
centers, and primary health clinics or ambulatories in need of repair
or reconstruction throughout Armenia. The situation in Armenia’s
rural areas, especially in remote and isolated communities, and the
earthquake zone, is particularly severe. The Project targets those
populations most affected by the economic crisis, and the Additional
Financing will help to meet these and other needs over the medium-term
as part of the Government’s anti-crisis measures.

"The main strength of ASIF is in its approach to enable local
communities to identify their own investment needs," said Asad Alam,
World Bank Regional Director for the South Caucasus. "While this
creates much-needed jobs in the current environment, the success of
the program will also depend on how well local communities are able
to sustain these new investments."

ASIF has successfully been in operation for the last decade. So far,
737 micro-projects in 298 rural and 74 urban communities, including the
capital Yerevan, have been completed under the project, reaching out
to 2.7 million beneficiaries across Armenia. The Additional Financing
will support infrastructure improvements in 35 communities, and will
create short-term employment of up to 68,600 days of labor.

The ASIF III Project has two main components. It supports community
investments in the poorest communities of Armenia through basic
small-scale social and economic infrastructure rehabilitation. These
investments are made based on the community-driven development approach
where communities are responsible for identifying their own priorities,
contributing to the financing of their micro-projects, and maintaining
them after project completion.

The ASIF III Project also complements community investments through
local-level institutional strengthening and capacity building for
improved management, monitoring, and evaluation.

The Additional Financing will provide funding for infrastructure
rehabilitation dependent on its crisis-response nature, including the
need to create employment while improving basic social and economic
infrastructure.

"By the time the Project is completed, around 235 of the most needy
communities will have benefited from newly constructed and renovated
schools with heating; specialized schools for orphanages, handicapped
children, and art students; sports facilities; community centers;
and potable water in homes," said Ivan Drabek, head of the World Bank
team designing the project.

The IBRD Flexible loan has a maturity of 25 years and a grace period
of 10 years included.

Since joining the World Bank in 1992 and IDA in 1993, the commitments
to Armenia total approximately US$ 1.3 billion.