Armenian government amends loan agreement with EDB on allocation of $200 million from ESDF for construction of Kajaran tunnel
YEREVAN, December 27. /ARKA/. On Friday, the Armenian government approved the proposal to sign an additional agreement No. 1 to the agreement between the Republic of Armenia and the Eurasian Development Bank (EDB) on the provision of an investment loan in the amount of $200 million to finance the construction of the Kajaran tunnel. The loan will be provided from the Eurasian Fund for Stabilization and Development (EFSD).
As stated in the explanatory note to the document, the agreement was signed on July 26, 2024 and later ratified by the parliament.
The 8.6 km long Kajaran tunnel will become an important element of the North-South transport corridor connecting the borders of Armenia with neighboring Iran and Georgia. The tunnel will reduce the time to travel this section of the road corridor by 50% and increase the average speed from 50 km/h to 80 km/h. The construction work will take about 6 years to complete.
According to the project, it is also planned to modernize a 4-kilometer section of the M2 Yerevan-Yeraskh-Goris-Meghri-Iranian border road leading to the entrance to the tunnel.
According to the terms of the loan, the interest rate will be 4% per annum, and the repayment period will be 20 years, 5 of which will be a grace period.
As noted in the government decision, at the current stage of construction, it became necessary to amend the agreement in order to ensure control during the construction work, which is to be carried out only by the organization that developed the working draft of the project.
At the same time, the contract does not provide for a procedure for the non-competitive selection of a consultant, which in turn would ensure the possibility of concluding an author's agreement with the designer.
Therefore, it was decided to amend the draft supplementary agreement to the agreement on the non-competitive selection of procurement procedures for the EFSR.
The North-South Corridor is one of the most ambitious projects in the history of independent Armenia. This road will reduce the distance from the border with Iran to the border with Georgia from 556 to 490 kilometers. The road will significantly facilitate access to the Black Sea not only for Armenia, but also for Iran.
In general, the North-South road corridor project, which was planned to be implemented within 4-5 years (the start was given on September 13, 2012), but having spent less than $ 1 billion, as of May of this year it was implemented by only 10%. At the same time, the volume of attracted loans as of the end of May 2024 amounted to $ 800.7 million.
