Armenia
Member since
Member since
Objective 1
One of the EDB’s objectives until 2026 will be to support projects that build and upgrade basic infrastructure to protect the country’s energy and transport security and sustainable economic development.
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Priority 1.1
In the strategy period to 2026, the EDB will work to diversify electricity generation sources in Armenia and promote its integration with the energy systems of neighbouring countries. Implementing renewable energy projects will also help to mitigate adverse environmental impacts in line with sustainable development principles. Developing renewable energy is a strategic priority of the Armenian government as it will help to diversify the energy mix and promote energy security. In addition, renewable generating facilities are a green source of energy, the development of which is supported by sustainable development principles. The EDB will focus on distributed solar power projects and the construction and modernisation of hydropower facilities. In pursuing Armenia’s energy development priorities, in addition to renewable energy, the Bank will work to modernise existing conventional generation facilities, including the project to extend the lifetime of Armenia NPP’s Unit 2. The sustainable development of Armenia’s energy system will require more investment in power grid efficiency. Relevant projects will enhance the reliability of power transmission as an element of the country’s energy security.
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Priority 1.2
The Bank will focus on projects promoting the sustainability and safety of industrial and transport infrastructure in Armenia. Priority projects will be those considered and developed by the Ministry of Economy and the Ministry of Territorial Administration and Infrastructure for their potential to launch during the new strategy period: modernising the Yerevan–Tbilisi cross-country railway infrastructure; developing rail and ferry links between the ports of Poti and Caucasus; increasing South Caucasus Railways’ investment in rail infrastructure; industrial projects to modernise the infrastructure for processing concentrates into crude metals; and projects to mitigate adverse environmental impact in industry (for example, processing of copper-molybdenum and goldcontaining tailings). The EDB will help implement projects that improve the efficient use of natural resources in basic industries and innovative transport projects. The Bank will focus specifically on projects that develop not only physical infrastructure but also management and transportation technology and their automation reflecting international best practice. As a development institution, the EDB will partner in financing projects to introduce fare collection systems in land transportation and develop public-private partnerships in transportation management. In passenger transportation, this could be the project currently under consideration to introduce competition into inter-city and inter-regional road networks.
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Objective 2
The EDB’s mission is to promote a market economy in its member countries. One of the Bank’s priorities will be to support the development and growth of export-oriented enterprises. This is directly linked to the national objective to promote the country’s competitiveness and balance of trade. Armenia’s mining and agriculture are economic sectors with export potential. The Bank will also support job creation in the service sectors such as tourism and retail.
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Priority 2.1
The EDB aims not only to improve the living standards of people employed in industry by creating high-performance jobs and increasing output but also to unlock Armenia’s potential as an exporter of agricultural produce to EDB countries. To achieve this, the EDB will help to modernise and promote industrial development by financing projects that enhance the processing of raw materials and increase the added value of products. The Bank will prioritise projects oriented to both domestic and foreign markets
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Priority 2.2
Developing tourism and increasing the share of services, including digital ones, in foreign trade
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Objective 3
is crucial to Armenia’s sustainable economic growth in the strategy period to 2026. The EDB’s main objective is to help reduce dependence on imports of key agro-industrial commodities and to develop a food supply chain.
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Priority 3.1
Despite agriculture’s importance to the Armenian economy, the sector is generally developing extensively. The EDB’s objective in this strategy period is to intensify agricultural development by financing projects that enhance raw materials processing and increase the added value of products. The Bank will prioritise projects oriented to both domestic and foreign food markets where there is continuous and substantial demand and focus on projects that increase the area of land used for agriculture and improve agricultural productivity. In particular, the EDB will focus on plans to build 15 water reservoirs in Armenia by 2026.
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Priority 3.2
Building a network of wholesale distribution centres is an integration priority that will help to implement large-scale cross-border projects in the EDB region. In the 2022–2026 strategy period, the EDB will actively explore opportunities for implementing such projects in Armenia. Over and above its integration effect, a high-quality logistics infrastructure would significantly enhance e-commerce development by promoting effective SME trade. The Bank will also focus on projects to introduce international quality standards for agricultural production and processing.
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Objective 4
In the new strategic period, the EDB will continue to support the development of Armenia’s financial system. The Bank will also work with banks to support targeted lending programmes. In addition, it will be open to other forms of cooperation with intermediaries, including participation in investment funds or innovative special-purpose vehicles. To further support enhancement of the country’s financial sector and government initiatives to de-dollarise the banking sector, the EDB will seek opportunities to lend in the national currency.
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Priority 4.1
Armenia’s financial system demonstrates ‘mid-level’ development. The EDB’s Country Strategy targets the modernisation and digitalisation of the financial system and aims to encourage new investors and issuers, including those in EDB countries, to enter the market. This in turn will attract additional capital to Armenia’s financial markets and boost trading on stock exchanges. It will also develop new financial instruments (including derivatives) and increase the use of national currencies in capital markets and in trade with EAEU countries.
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Priority 4.2
The EDB has provided targeted loan facilities to Armenian banks for on-lending to local businesses. In the new strategy period, the Bank will continue to build the capacity of the financial services market and reduce interest rate spreads by providing targeted financing to Armenian commercial banks, including for SME support programmes.
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Objective 5
The Armenian government identifies digital technologies as a strategic development objective. Today, technology is needed to ensure efficient governance and intensive economic development. As part of its digital agenda for Eurasian integration, the EDB will help to implement projects that exchange and disseminate the digitalisation expertise of the countries in which it operates and will finance projects that set up shared digital platforms. The Bank has established the Fund for Digital Initiatives to support digital transformation in its countries, including Armenia. To identify promising digital projects, the EDB will work closely with the country’s state authorities, including in respect of measures outlined in Armenia’s 2021–2025 Digitalisation Strategy and Plan of Action.
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Priority 5.1
As a regional digitalisation institution, the EDB will support projects during the strategy period that promote the development of Armenia’s digital infrastructure, including physical telecommunications infrastructure and digital platforms. It will also disseminate best practice as member countries implement e-government systems and digital public services. The Bank will support digital projects in the corporate sector that strengthen integration ties with Eurasian countries and contribute to SDGs.
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Priority 5.2
In the new strategy period, the Bank will support data circulation and management projects. Under its strategic objective to develop end-to-end cross-border transport corridors within the EAEU, the EDB will support potential digital services connecting Armenia to that project.
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Indicator
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2024
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2025
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Drivers
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GDP growth
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2024
5.7%
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2025
5.3%
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Drivers
Increasing domestic demand Expansionary fiscal policy Easing of monetary policy Resumption of Amulsar field
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Year-end inflation
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2024
3.6%
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2025
3.6%
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Drivers
Inflation will accelerate from 2023 low level due to easing monetary conditions strengthening domestic demand dram depreciation
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Interbank lending rate, year’s average
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2024
8.6%
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2025
8.0%
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Drivers
The round of interest rate cuts could end in the first half of 2024 as inflation gets closer to lower bound of the target
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AMD/USD exchange rate, year’s average
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2024
414
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2025
421
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Drivers
Import growth outpacing export, remittances and tourist arrivals stabilization will put pressure on national currency
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