WASHINGTON (RFE/RL) – The World Bank’s International Development Association has approved a long-term–no-interest loan to help Armenia build market-based institutions and provide lines of credit to private enterprises.
The loan of approximately $16.8 million will fund just over 40 percent of the cost to create a Private Investment Finance Corporation of Armenia to promote enterprise development. It will also provide training and technical services to banks– other financial institutions and a series of Armenian funds and agencies implementing economic reforms.
The European Bank for Reconstruction and Development–Germany’s Kreditanstalt fuer Wiederaufbau and private investors are expected to provide another $14 million for the project with additional financing to come from the US Agency for International Development and others.
The overall Enterprise Development Project–according to the World Bank– aims to increase the credit worthiness of Armenian companies through improved planning and development of export links and joint-venture deals to enhance investment–trade and technology.
The World Bank loan is also aimed at strengthening the lending capacity of Armenia’s banking system–especially for export-oriented projects.
The IDA loan charges only a small annual fee and runs for 35 years with no repayment required for the first ten years.