|
EBRD provides Armenian agricultural markets with US$ 15m
The first agribusiness funding in Armenia, a US$ 15 million (ECU 11.7 million equivalent) loan to promote the development of a modern wholesale market distribution network for fresh food products, has been signed by the European Bank for Reconstruction and Development (EBRD). Part of the loan is to Agrobank (US$ 3.5 million), a private bank, which will set up a credit line to finance small private businesses operating in the sector. This is the first credit line to an Armenian bank.
Juan Miranda, Co-Director of the EBRD’s Agribusiness team, said: “The EBRD’s loan will promote a demand-driven marketing system for agricultural products. Competition should be improved as farmers will be provided with incentives to produce a wider range of higher quality food products for Armenian consumers. New business opportunities for wholesalers, agro-processing enterprises, traders and food retailers should also be created. Lastly, Armenia’s position as an exporter of horticultural products, an area in which it enjoys strong comparative advantages, should be restored”.
Vahram Avanessian, Deputy Minister of Finance for Armenia, said: "This project is a very important one for our country. It helps producers and consumers and provides public infrastructure for use by our emerging local private sector. The credit line also provides medium to long term finance through Agrobank to help those private entities associated with the industry. We are delighted with the concept and with its intentions. The Government will do its utmost to ensure its smooth implementation".
Armenia is the first country in the CIS to privatise most of its agricultural land. However, the lack of an adequate food marketing infrastructure has been a major constraint within the agricultural sector. Consumers, agro-processing enterprises and traders are faced with poor quality, limited choice and high prices. Farmers have to sell their produce in small quantities through street markets. As a result, competition among private farmers is limited, wastage is high and efficiency of production is low.
US$ 11.5 million will go to the Armenian Agricultural Wholesale Market Company, which will build and operate the main wholesale market facility in Yerevan and six farmers’ collection and assembly markets located in the main agricultural production areas.
The loan is part of a wholesale market programme which has been developed by the EBRD in a number of its countries of operations. Similar projects have been approved in Belarus, Bulgaria, Hungary, Romania and Ukraine.
|
