Government approves $2 million in loan guarantees to AVO private developer

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Economy

28.08.2009, 01:40

The Armenian government has approved today $2 million in loan guarantees to a private AVO developer to finish construction of a residential building on Abovian street in central Yerevan.

YEREVAN, August 27, /ARKA/. The Armenian government has approved today $2 million in loan guarantees to a private AVO developer to finish construction of a residential building on Abovian street in central Yerevan.

Finance minister Tigran Davtian said the private developer needs the guarantees to seek a loan from Armbusinessbank to accomplish the project. The guarantees are given for a three year term. In return the company will deposit the housing space under construction and the land plot.

Last April, the government approved 20 billion drams ($55 million) in loan guarantees to private developers to help them complete their housing projects. Five construction firms have reportedly received such guarantees since then. Construction sector shrank by 55.5 percent in the seven months of this year, contributing to the total GDP fall. According to the minister, the move is expected to reinvigorate the sector that was the main driving force behind a double-digit GDP growth in the previous six years.

Earlier this month, Urban Development Minister Vartan Vartanian said the wide-ranging anti-crisis measures of the government would ease the dramatic decline in the construction sector in the second half of this year.

The government said also it will spend part of a $500 million anti-crisis loan provided by Russia on housing construction in Armenia’s northern regions and another $33 million portion of the loan will be channeled into a recently established state mortgage fund assigned to provide relatively cheap housing loans to the population. M.M. -0-

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