YEREVAN, June 17. /ARKA/. The World Bank’s Board of Executive Directors today approved the first phase of a program that will improve access to irrigation and drinking water systems in rural and underserved settlements, create jobs, boost economic growth, and strengthen water security and resilience against extreme weather in Armenia.
The first phase of the “Water and Irrigation Services Enhancement” program, which runs from 2025 to 2031, includes an $80 million equivalent loan from the International Bank for Reconstruction and Development (IBRD) and co-financing from the French Development Agency, European Union, and Government of Armenia, for a total of $185 million equivalent. The total financing package for the upcoming 10 years is $435 million, including $330 million in financing from IBRD.
“This project will finance a comprehensive reform of the institutions and policies that guide water management in Armenia. It includes improvements to irrigation services and the expansion of reliable water supply services in selected rural settlements,” said Carolin Geginat, World Bank Country Manager for Armenia. “By investing in irrigation and water supply systems, along with reforming policies and institutions, the project will also help mitigate challenges such as droughts, floods, and extreme heat. Overall, it will enhance the quality of life and economic stability of farmers and rural communities in Armenia.”
Armenia has seen significant economic growth in recent years, yet poverty persists. While services and industry now drive much of the country’s growth, agriculture remains a major employer and supports many families.
However, high leakages from deteriorated and inefficient irrigation systems result in reduced crop yields, calling for upgrades to protect both livelihoods and the economy. High water loss rates have led to sub-optimal irrigation outcomes and an unsustainable financial position of water agencies in the country.
Similarly, about 650,000 people in 579 rural settlements remain unserved since they live outside the area covered by the lease contract under which regulated water services are provided. Instead, they have to rely on sources and systems with limited treatment, efficiency, and oversight, such as aging pipes, spring or groundwater sources, and community-managed services.
The project aims to provide efficient and financially sustainable irrigation services to farmers and improve access to safely managed rural water supply services in the Ararat, Armavir, Kotayk, Aragatsotn, Shirak, and Tavush regions. The project will also promote improvements to the governance structure of Water User Associations, including through greater women’s participation.
The six-year first phase of the program will be implemented by the Water Committee under Armenia’s Ministry of Territorial Administration and Infrastructure. This initiative supports infrastructure upgrades and strengthens sector management institutions, aligning with Armenia’s commitments to reduce greenhouse gas emissions and enhance strategies for adapting to extreme weather.
The World Bank is committed to continuing its support to Armenia in its development path for reducing poverty and creating a more prosperous and resilient future. Since 1992, the World Bank has provided around $3 billion to Armenia, including a current portfolio of around $400 million in investment lending, grants, analytical work, and technical assistance from the IBRD, trust funds, and the International Development Association, the World Bank’s fund for the poorest countries and to which Armenia also became a donor in 2023.
