YEREVAN METRO REHABILITATION PROJECT TO START THIS YEAR WITH FINANCIAL ASSISTANCE OF EBRD

Noyan Tapan
March 10, 2010

YEREVAN, MARCH 10, NOYAN TAPAN. The Yerevan metro rehabilitation
project will start this year with financial assistance of the European
Bank for Reconstruction and Development (EBRD). On March 10 Armenian
Minister of Finance Tigran Davtian and EBRD Yerevan Office Director
Valeriu Razlog signed a 15 million-euro credit agreement, under which
a grant of 5 million euros will be provided by the EU Neighborhood
Investment Facility, while the EBRD and the European Investment Bank
will give credits of 5 million euros each.

The indicated sum will be spent to finance capital investments on
rehabilitation of the Yerevan subway. In particular, it is planned to
modernize rolling stock, repair rails and the old power supply system,
purchase a hand car for technical sercices, and to replace the pumping
stations used for pumping water out of the tunnels.

This investment project is expected to result in considerable savings
of power thanks to a reduction in water pumping expenses, which will
decline by 50%, according to rough estimates.

The credits are provided at EUR LIBOR+1% interest rate, for 15 years,
with a 3-year grace period.

According to the press service of the RA Ministry of Finance, in order
to ensure the implementation of measures envisaged by the credit
agreement, a project assistance agreement was signed with Yerevan
municipality, as well as a project agreement was signed with Yerevan
Metro after Karen Demirchian CJSC.

In the words of T. Davtian, with the signing of these agreements,
the 18-month negotiations have been completed. "On the whole, the
financial package is quite favorable, grants make about 60%, which is a
good index by international standards," the minister said, adding that
the project’s implementation would be under strict financial control.

Yerevan Mayor Gagik Beglarian said that the water pumped from the
subway would be used later for irrigation in the city. He assured
those present that for about 30 years "we will not be concerned about
safe work of the subway".