Armenia, IFAD sign $11mln loan agreement for rural development

PanARMENIAN.Net - The government of the Republic of Armenia and the International Fund for Agricultural Development (IFAD) signed an $11 million loan agreement to finance the Infrastructure and Rural Finance Support Programme in the seven communities of northwestern province Shirak.

With a total cost of $52.8 million, the IFAD-supported project is co-financed with a $25-million contribution from the OPEC Fund for International Development (OFID); $3.5 million from other bilateral donors; $10.1 million from the government of Armenia; $3.5 million from the rural women and men benefitting from the project and $0.9 million from national financial institutions. The financing agreement was signed today in Rome by Armen Harutyunyan, Deputy Minister for Agriculture and by Michel Mordasini, IFAD Vice-President.

Over 70 per cent of the land area in Armenia is used for agriculture which provides employment to 44 per cent of the country's population, including 65 per cent of people living in rural areas. Agriculture activities such as horticulture, viticulture and livestock production are favored due to the high altitude of the land, small average farm size and abundant labor. This new IFAD-funded activity in Armenia helps respond to rapid changes in the business, financial and agricultural sectors as the country's economy continues on the road to recovery. It aims to improve the economic and social status of the population by generating income growth and sustainable employment opportunities, a press release says.

The program will target more than 66,000 beneficiaries, with a specific focus on women-headed households which are now more prominent as increasing numbers of men and young people are leaving rural areas in search of jobs. The seven provinces covered (Lori, Tavush, Gegharqunik, Vajots Dzor, Sjunik and Aragatsotn) have the highest incidence of poverty in rural Armenia, but also have high agricultural potential to lift beneficiaries out of poverty.

Since 1995, IFAD has invested a total of $78.2 million in 6 programs and projects in Armenia benefitting approximately 394,000 rural households.