World Bank Grants $150 Million Loan to Armenia: How the Funds Will Be Used

The International Bank for Reconstruction and Development will provide a loan of approximately $150 million to the Republic of Armenia through two credit programs. The draft laws on ratification of the credit programs were approved during a meeting of the Armenian government.

One of the loan programs, which will allocate €102 million (approximately $110 million) to Armenia, aims to support the Ministry of Health in the implementation of comprehensive health insurance, improve the quality of primary health care, and reduce financial barriers to accessing health services for the population.

"The financial resources provided by the loan program are planned to be directed towards subsidized insurance premiums for beneficiary groups by the state. The amount and method of funds provided each year will be subject to agreement with the Ministry of Finance during the annual budget discussions," the decision justification states.

The loan agreement for the "Implementation of the Universal Health Coverage Program" was signed between the Republic of Armenia and the International Bank for Reconstruction and Development on July 25 of this year. The program is set to conclude on September 30, 2029.

The World Bank will also provide an additional $40 million to Armenia for the reconstruction of the "Shahumyan-2", "Marash", and "Yeghvnadzor" substations. These substations are crucial for ensuring the secure and reliable supply of electricity to the overall energy system of Armenia.

The "Shahumyan-2" substation was built in 1964, with a rated capacity of 250 MVA. The "Marash" substation was established in 1978, with a rated capacity of 375 MVA. The "Yeghvnadzor" substation was constructed in 1966, with a rated capacity of 126 MVA. Significant parts of the equipment in these substations have been in operation for over 40 years.

"The relays protection and automation equipment in operation, besides being old and worn out, lack the functions characteristic of modern necessary microprocessor devices," the decision notes.

The agreement for the "Armenia’s Energy Transition Program" was signed between Armenia and the World Bank on August 8 and August 6 of this year.