Infrastructure and Rural Finance Support Programme

7. Infrastructure and Rural Finance Support Programme


The overall objective of the programme is to improve the economic and social status of the population in selected, most disadvantaged rural areas generating employment and income opportunities by strengthening the agricultural production systems and the forward and backward linkages of value chains.

The programme includes 4 components: (i) Rural Finance, (ii) Rural Areas Water Infrastructure, (iii) Farmer Awareness and Support, and (iv) Programme Management.

The rural infrastructure component will be implemented in the following 7 marzes of RA: Shirak, Lori, Tavush, Aragatsotn, Vayots Dzor, Gegharkunik, and Syunik, which have the highest incidence of poverty in the Republic of Armenia, but at the same time, have agricultural potential. The Rural Finance component will be implemented countrywide.

The investment and incremental recurrent expenses of the programme, including contingencies, amount to USD 52.8 million (AMD 21.3 billion), of which 22% will be allocated to Component 1 (loans and investments), and 68% to Component 2 (Infrastructure). Unanticipated physical and financial expenses were calculated at 12% of the total expenditure amount. Programme management expenses account for 8% of the total.

IFAD (IFAD) financing will amount to USD 11.35 million, including USD 11 million loan and USD 0.35 million grant (about 21% of the programme amount), and OFID funding will amount to USD 25 million. Government co-funding is estimated to be USD 10.1 million (19%).

Sustainable Land Management for Increased Productivity in Armenia Programme (IFAD/GEF)

The International Fund for Agricultural Development (IFAD) and the Global Environment Facility (GEF) will jointly implement the Sustainable Land Management for Increased Productivity in Armenia Programme in 3 marzes of RA. The programme will cost around USD 4.3 million.

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