Financial Cooperation Between Armenia and Germany Begins

The government today approved the proposal to sign the agreement on financial cooperation between the Government of the Republic of Armenia and the Government of the Federal Republic of Germany for the year 2016. According to the agreement, the German government allows the Armenian government to attract financial resources and assistance from the KfW Development Bank for the following programs:

• Financial assistance of up to €750,000 for the implementation and support of necessary related measures under the "Armenian-German Foundation, refinancing line I" program;
• Financial assistance of up to €2,700,000 for the implementation and support of necessary related measures under the "Integrated Management of Water Resources of the Akhuryan River" program;
• Additional financial assistance of up to €2,000,000 under the "Community Infrastructure II, Phase 3" program;
• Overall financial assistance of €5,339,139.38 for the implementation of the agricultural insurance program in Armenia;
• A loan of up to €20 million with preferential terms for the "Armenian-German Foundation, refinancing line I" program.

The agreement is a framework one under which separate financing or loan agreements are to be signed in the future according to the aforementioned programs. The Minister of Economy of the Republic of Armenia, Tigran Khachatryan, speaking about agricultural insurance in relation to the project, mentioned that insurance companies have already begun to offer insurance policies in the regions covered by this agreement. He noted that these are parallel processes that do not interrupt existing procedures, and visible results are expected in the near future.

Khachatryan added that the amount of the insurance premium is related to the risk level of the zone; the less risky the zone, the lower the insurance premium. "We are providing an additional 10% co-financing, in addition to 50%, for those agricultural enterprises that decide to insure against all risks at once, including hail, premature frost, and fire. By spring, we will have a clear picture," he said.