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The country strategy of the Eurasian Development Bank

Objective 1

Facilitating the development of sustainable infrastructure

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

Developing and modernising energy infrastructure

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

Developing sustainable and safe industrial and transport infrastructure

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

Diversifying industry and exports

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

Modernising and setting up new high-performance enterprises

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

Developing tourism and increasing the share of services, including digital ones, in foreign trade

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Objective 3

Food security

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

Improving agricultural productivity

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

Supporting the development of a commodity distribution network

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

Developing accessible financial services

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

Developing financial infrastructure

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

Increasing the capacity of the financial services market, including with targeted SME financing programmes

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

Digital transformation of the economy and public governance

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

Promoting the development of safe and sustainable digital solutions and infrastructure

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

Improving the efficiency of data circulation

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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EDB Investment Portfolio

As of April 2024

22 projects in five sectors:
Financial sector

16 April 2024
The petrochemical industry is a high-tech sector with a significant multiplier effect. It produces four out of every five items commonly used by people today. Currently, the industry is undergoing global structural changes, presenting significant opportunities for Eurasian economies. The Bank’s latest report titled Eurasian Petrochemical Industry: Opportunities for Deeper Processing outlines blocks of priority measures to unlock available potential. These include a clustering policy, additional focus on low-tonnage petrochemical production, and the implementation of circular production mechanisms. Unleashing the Eurasian region’s potential will make the petrochemical industry an effective way to address “path dependence” by enhancing process stages, promoting technological advancements and securing a foothold in the global division of labour.
12 April 2024
The Eurasian Development Bank (EDB) has released its latest Macroeconomic Review for the Bank’s six member states.
20 March 2024
The Eurasian Development Bank (EDB) has released a report titled Infrastructure in Eurasia: Short- Term and Medium-Term Trends. Eurasian countries  have incorporated the United Nations Sustainable Development Goals (SDGs) into their economic policies. However, their achievement is impeded by the significant deficit and high wear and tear of infrastructure. Transportation, logistics, energy, telecommunications, water supply and wastewater infrastructure suffers from inadequate investment. Rapid urbanisation, the active adoption of new technologies and climate change are driving new requirements for infrastructural development. The directions of trade flows are shifting, leading to the creation of new transportation corridors and energy links.
16 February 2024
The Eurasian Development Bank (EDB) has released the latest Macroeconomic Review for its six member states. This regular publication provides a roundup of the macroeconomic situation and projects near-term developments in the member countries. The review also contains detailed statistics on key macroeconomic indicators.
13 February 2024
The Eurasian Development Bank (EDB) and Russian-Armenian University (RAU) are launching collaborative research and training programmes focusing on public-private partnerships (PPP). A relevant agreement on the EDB’s technical assistance was signed by Denis Ilin, EDB Senior Managing Director, and Edward Sandoyan, Rector of RAU. This agreement builds upon a previously established memorandum between the two parties. The EDB Technical Assistance Fund will extend a grant to finance this initiative, which is designed to enhance Armenia’s PPP landscape in the long term.
16 November 2023
In the summer of 2023, Central Asia was faced once again with water shortages and the significant impact these have on agriculture. The sector relies on irrigation, consuming up to 80% of available water, and has a poor track record with regard to the efficient use of water resources. The irrigation infrastructure is over 50 years old. More than half of all irrigated land has become salinised and 40% of water is lost through irrigation canals. A new EDB study entitled “Efficient Irrigation and Water Conservation in Central Asia” outlines ten practical steps for preserving irrigated land potential and promoting water conservation. The list includes four recommendations for adoption at the regional level and six at the national level. The measures are designed to save enough water each year to support sustainable development. Implementing the measures will require collaboration between governments, farmers and multilateral development institutions. The need for urgent action is intensified by the anticipated reduction in the flow of the Amu Darya River
30 October 2023
On 28 October 2003, Yeremyan Projects launched its first world-class agro-industrial complex in Armenia’s Tashir community, Lori Region. The Eurasian Development Bank (EDB) provided US $32 million for this project
27 October 2023
The Eurasian Development Bank (EDB) and Russian-Armenian University (RAU) are launching collaborative research and training programmes focusing on public-private partnerships (PPP). A relevant memorandum was signed by Denis Ilin, EDB Senior Managing Director, and Sergey Kapinos, RAU Vice-Rector for International Cooperation
27 October 2023
The debut issue of three-year EDB bonds, denominated in US dollars, was included in the Armenia Securities Exchange’s (AMX) Abond main list as of 26 October 2023. Prior to that, the exchange’s infrastructure was modernised with a grant provided by the Eurasian Development Bank’s (EDB) Technical Assistance Fund, resulting in more than doubling the total value of listed securities. Nikolai Podguzov, Chairman of the EDB Management Board, made this announcement during his visit to Armenia
14 August 2023
The Eurasian Development Bank (EDB) is floating a debut bond issue on the Armenia Securities Exchange (AMX), bidding is taking place through Ardshinbank between 15 and 31 August 2023. The nominal value of the three-year issue is up to US $30 million, with a face value of US $1,000 per bond. The coupon period is 6 months with a coupon rate of 6% per annum

Yerevan Representative Office

Erebuni Plaza Business Centre, office 811, 26/1 Sargsyan St., Yerevan, 0010, Republic of Armenia

Outlook for the key macroeconomic indicators as of December 2023

GDP growth
Increasing domestic demand Expansionary fiscal policy Easing of monetary policy Resumption of Amulsar field
Year-end inflation
Inflation will accelerate from 2023 low level due to easing monetary conditions strengthening domestic demand dram depreciation
Interbank lending rate, year’s average
The round of interest rate cuts could end in the first half of 2024 as inflation gets closer to lower bound of the target
AMD/USD exchange rate, year’s average
Import growth outpacing export, remittances and tourist arrivals stabilization will put pressure on national currency