A development bank founded by Russia and Kazakhstan provided the Armenian government on Tuesday with a $150 million loan that will finance the ongoing reconstruction of Armenia’s main highways stretching more than 550 kilometers to neighboring Georgia and Iran.
The chairman of the Almaty-based Eurasian Development Bank (EDB), Dmitry Pankin, signed a corresponding agreement in Yerevan with Armenian Transport and Communication Minister Gagik Beglarian after talks held with Prime Minister Hovik Abrahamian.
In a statement issued after the signing ceremony, the EDB said the loan repayable in 20 years will finance work on a 20-kilometer highway section encompassing Armenia’s highest mountain pass close to the Iranian border.
The Kajaran pass situated over 3,000 meters above the sea level is frequently closed to traffic in winter months because of snowstorms and ice. The Armenian government did not explain just how the tortuous road, where serious accidents have not been uncommon, will be upgraded.
The EBD-funded work will be part of the government’s ambitious North-South project meant to facilitate the landlocked country’s access to the Georgian and Iranian ports. Another aim of the project worth an estimated $1.5 billion is to enable Iran to use Armenian and Georgian territory for large-scale freight shipments to and from Europe.
In 2009, the Manila-based Asian Development Bank (ADB) lent the government $500 million for the first phase of the planned road upgrades. But it was not until 2012 that a Spanish construction firm contracted by the government began expanding and repaving two highways running south and northwest of Yerevan.
The total length of the two roads exceeds 90 kilometers. Their $280 million reconstruction is due to be completed by next year.
Pankin stressed the importance of the biggest road project in Armenia’s history in an interview with the Armenian news agency Arka. He said the reconstructed roads will reduce the cost and increase the speed of cargo transport through the country.
Armenia joined the EDB in 2009, three years after the bank’s establishment by Russia and Kazakhstan. Its government and business enterprises have obtained about $130 million in loans from the bank since then.
Pankin told Arka that the EDB will soon disburse a $40 million loan for the rehabilitation of Armenia’s irrigation networks. He revealed that the authorities in Yerevan are also seeking a separate budgetary credit and that the EDB is considering the request. “It is still too early to speak of our response,” he said.