ARMINFO News Agency, Armenia
November 9, 2017 Thursday
KfW will provide 80 million euros for reforms in the field of
irrigation, solid waste management and the introduction of
agricultural insurance
Yerevan November 09
Naira Badalyan. The German Development Bank (KfW) will provide Armenia
with a loan of 80 million euros for budget assistance (coverage of the
budget deficit). The draft loan agreement was approved at a meeting of
the Armenian government on November 9.
As the Minister of Finance of Armenia Vardan Aramyan noted, the funds
will be issued in tranches of 40 million euros. in 2017-18 years. The
funds will be spent on reforms in the field of irrigation, solid waste
management and introduction of agricultural insurance mechanisms. As
part of the latter KfW will provide grants of technical support in the
amount of 8.3 million euros.
The loan agreement, as explained by the head of the Ministry of
Finance, is stipulated by the state budget of the country for 2017,
where it is indicated that 40 million euro from the deficit of $ 220
million will be covered by this credit assistance, he said. The loan
will be issued for 15 years, with a grace period of 5 years. The
interest rate is fixed (it is fixed for each tranche), the debt
payment is 0.25% in relation to the unused loan amount (for tranche 1
is calculated 4 months after the signing of the agreement, for tranche
2 is calculated 16 months after the signing of the agreement), a
one-time The commission fee is 1% of the loan amount, the maturity of
the principal amount is 15 years, the grace period is 5 years, the
technical support funds provided under the program total 8339139.38
euros. The effective interest rate on the loan is about 2.55%.
Meanwhile, as of December 31, 2016, the state debt of Armenia was
2.875.6 billion drams or $ 5.942.1 million (56.6% of GDP compared to
48.7% in 2015). Over the past year, the republic has increased its
debt portfolio by 419.3 billion drams or $ 864.4 million In
January-September, 2017, the level of the country's national debt
reached the level of 3 017.8 billion drams or $ 6.308 billion, of
which the government debt amounted to 2 725.3 billion drams or $
5.696.6 billion and the Central Bank's debt - 292.5 million AMD or $
611.3 million ($ 1 = 478.41). By the end of 2017, Armenia's total debt
will reach $ 6.8 billion. Following the results of 2018, the amount of
state debt will continue to increase. According to forecasts, by the
end of next year the total state debt will be about 60% of GDP or over
$ 7.2 billion. State debt (interest rate) next year will require 140.5
billion drams (about $ 300 million), instead of 120.3 billion drams in
2017 and 98.3 billion drams in 2015. Armenia's state debt servicing in
2020 will cost already $ 921 million. The growing national debt and
high migration in Armenia have already deepened the specific debt
burden per capita to $ 2.1 thousand by July 1, 2017, of which $ 1.7
thousand comes from external debt.
