The World Bank announced recently that its board of executive directors has approved a $50 million loan for the Trade Promotion and Quality Infrastructure Project in Armenia, which seeks to strengthen the capitol of Yerevan's ability to promote exports, boost domestic and foreign investment and improve services for business.
The bank said Armenian exports are limited to a few products with little value-added content and that the country needs to increase the level of foreign direct investment (FDI).
"Trade is a key driver of growth in the transition to high income," Jean-Michel Happi, the World Bank country manager for Armenia, said. "This project will support policies and programs aimed at upgrading Armenia's physical, human and institutional assets, which are crucial to sustained export competitiveness. Raising long-term economic growth requires that the government tackle binding structural constraints to investment and exports."
The project is expected to increase the effectiveness of trade promotion, boost investment and exports by providing services to local exporters, attract FDI through efficiency, and update the quality of national infrastructure.
"To boost exports and FDI, Armenia needs a strong institutional framework," Feyi Boroffice, the World Bank task team leader on the project, said. "The project is designed to provide adequate incentives to enhance effectiveness of the government in delivering trade promotion and quality infrastructure services to firms."
Total financing of the project will be approximately $59.5 million, $9.54 million of which will be contributed by the Armenian government. The bank will provide a $50 IBRD loan of variable spread with a 10 year grace period and a total repayment term of 25 years.
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