Volume of EFSD programs in Armenia's 2026 budget is 37.2 billion drams, according to the Ministry of Finance
YEREVAN, October 27. /ARKA/. Funding for programs envisaged in Armenia's 2026 budget to be executed jointly with the Eurasian Fund for Stabilization and Development (EFSD) has been set at 37.2 billion drams.
According to Finance Minister Vahe Hovhannisyan, this figure exceeds the 19.8 billion drams envisaged in the 2025 budget and the 13.4 billion drams envisaged in the 2024 budget.
"These programs are primarily capital projects, most of which are related to the development of the North-South transport corridor," he said during a discussion of Armenia's draft state budget for 2026.
He also clarified that of the total amount, 30.8 billion drams will be provided through borrowed funds, and 6.3 billion drams through co-financing by Armenia. The minister clarified that one of the initiatives concerns the Kajaran-Agarak section, and the other the Kajaran tunnel.
"The budget allocates 26 billion drams for the first initiative, and 10 billion drams for the second," he explained, noting that this amount includes both loans and grants.
Regarding the 1.56 billion drams in grant funds, Hovhannisyan noted that they were received some time ago, but their implementation is planned for next year.
"We are talking about 1.51 billion drams provided by Russia to Armenia as non-repayable financial support for the creation of a public finance management information system. These funds were allocated in 2017, but have not yet been implemented due to the system's failure," he explained, adding that the system's implementation is planned to begin next year following a competitive bidding process.
He also noted a $2 million grant from the EFSD, of which 39 million drams will be allocated for development next year.
The estimated cost of constructing the southern section of the Sisian-Kajaran highway, part of the North-South Transport Corridor, is €452 million. Financing will be partially provided by loans from the EBRD, EIB, and EFSD, as well as the Armenian government.
The goal is to construct a new 60-kilometer section of the road, which will increase the speed limit from 50 to 100 km/h. The project includes three-lane asphalt concrete roads, five tunnels (one of which is located near Bargushat), 11 bridges, 68 barriers, and 43 retaining walls. The project is expected to be completed in November 2032.
It was previously reported that the Armenian government approved a $200 million loan agreement with the EFSD for the construction of the Kajaran Road Tunnel. The loan will be repaid in US dollars at 4% interest. The repayment period is set for 20 years, with an initial grace period of five years.
The tunnel is expected to reduce travel time along this section of the road corridor by 50% and increase the average speed from 50 to 80 km/h. Construction is expected to last approximately six years.-0-
