Monday, 18 December 2017
RA Government, KfW Sign Cooperation Agreements
Prime Minister Karen Karapetyan received a delegation led by Reconstruction Credit Bank (KfW) Regional Director Olaf Zimelka. The meeting was followed by the signing of cooperation agreements.
The Prime Minister noted that the frequently held bilateral contacts testify to the importance of interaction with KfW, and that Armenia is keen to continue and develop cooperation. The head of the Armenian government expressed confidence that the Comprehensive and Enhanced Partnership Agreement, which was recently signed between Armenia and the European Union, would contribute to the strengthening of relations with Germany and the Reconstruction Credit Bank.
“Today we will sign two documents - a loan agreement for Phase 2 of the Integrated Water Resources Management Program and a grant agreement for the Agricultural Insurance Scheme Support Program. The latter may go a long way toward boosting Armenia’s agricultural sector,” the Prime Minister pointed out.
Karen Karapetyan suggested considering the prospects for expanding public-private partnership and implementing investment programs in the private sector, noting that there are already successful examples of cooperation with international donors in Armenia.
The KfW Regional Director assessed as quite effective the programs implemented in our country and went on to highlight the importance of the agreements to be signed today in terms of further development of cooperation.
“You are the first country in our portfolio to embark upon the path of agricultural insurance. We know that small farmers in Armenia suffer serious damage due to adverse climatic conditions, and the idea of this project is just to work in the format of public-private partnership,” Olaf Zimelka said.
The following cooperation instruments were next signed: Grant Agreement on Agricultural Insurance Scheme Support Program (€5.3 million); Loan Agreement for Phase 2 of Integrated Water Resources Management/Akhurian River Program I (€18.5 million).
The program to be implemented within the framework of the first agreement is unique of its kind. For the first time, the governments of Armenia and Germany will support Armenian farmers on a proportional basis by providing insurance against climate-related risks. The German government will allocate 5.3 million euros in two installments: the first installment of 4.8 million euros will be used exclusively to cover the costs of insurance premiums of insurance contracts concluded as part of the agricultural insurance system; the second installment of 515 thousand euros will go to fund the costs of the system consultant. The amount of co-financing by Armenia is 5 million euros.
The activities envisaged under the second agreement will focus on the expansion of the Kumayri irrigation water tunnel, the construction of a pipeline system, as well as the acquisition and installation of irrigation equipment that will provide for more efficient irrigation of about 740 plots of arable farmland.
