The EBRD is prepared to invest over €180 million across various sectors of the Armenian economy over the next two years, according to the EBRD’s latest strategy for Armenia.
Serving as a roadmap for EBRD’s activity, the strategy for 2009-2010 focuses on areas that will help the country alleviate the effects of the economic downturn.
Although Armenia is not directly exposed to the turmoil on the global capital markets, the crisis will reach the country through diminishing remittances and declining exports. Armenia’s fledging prosperity is likely to be severely tested in the difficult years ahead, and the country’s best hope for weathering the crisis lies in further developing its small and medium enterprises.
In these circumstances the EBRD will uphold its commitment to support private micro, small and medium-sized enterprises by providing necessary financing for the development of this sector through local partner banks. At the same time, EBRD will foster its support for Armenian banks by offering credits for on-lending, and by introducing such new products as energy efficiency loans. EBRD will selectively pursue equity participation in Armenia’s leading banks and will encourage consolidation of the banking sector.
In the public sector, the EBRD will also support projects which promote transition and sector reform.
The EBRD strategy notes that progress in structural reform in Armenia has slowed down in recent years, and that significant challenges need to be addressed to promote an investment-friendly environment in the country.
The Bank has identified a number of important issues that need to be addressed, including diversification of the Armenian economy, improving the competitiveness of export-oriented production, promoting competition and limiting monopolies, tackling corruption, strengthening the financial sector and promoting commercialisation of public infrastructure.
To maximise the benefits of its investments in Armenia, the Bank will maintain policy dialogue with local authorities in order to advance structural and legislative reforms in the country, which will also increase Armenia’s investment appeal among potential investors.
Over the past four years, the EBRD’s investment in Armenia has more than quadrupled and reached €125 million across 43 projects. The EBRD’s pipeline for next two years in Armenia includes over 30 projects, for investments in excess of 180 million.
The EBRD is the largest single investor in Armenia. To date the Bank has committed over €240 million in 64 projects in all major sectors of the economy.