ArmInfo. Armenia amends the loan agreement with KFW and extends the term of access to loan funds.
As stated in the explanatory note to the document, the contract for the execution of construction works (duration 34 months) within the framework of the project was signed on April 21, 2023, and the start was given on June 9. Completion of construction works is scheduled for the second quarter of 2026, several more months will be required for testing, detection of defects, execution of documents for delivery and post-warranty payment. Without the above-mentioned letter of consent, it will be impossible to secure financing for the construction, and given the fact that all payments under the Project are made exclusively through direct payments to KFW, it is necessary to extend the period of access to these credit funds until December 30, 2026.
It is noted that the postponement of the date does not entail additional financial obligations for the state budget of the Republic of Armenia.
On August 27, 2020, the Government of Armenia approved the Action Plan for the acquisition and resettlement of land within the framework of the program, according to which the Kaps reservoir will be built. It was reported that in the 90s, the work was stopped, and the village of Jradzor, which was initially planned to be resettled, continued to live in the expected flood zone all this time. As Deputy Minister of Territorial Administration and Infrastructure Vache Terteryan stated at the time, a loan agreement for 60 million euros was signed with KfW in 2014 for the implementation of this project. And since, according to Terteryan, some of the village's buildings will be flooded already at the first stage, Jradzor should be resettled already at the first stage of construction. The new village, which will be located next to the reservoir, is planned to be populated by about 350 residents. According to the deputy minister, residents were offered two options: the allocation of certificates and the construction of a new settlement.
On May 18, 2023, the foundation of the reservoir was officially laid. The project is financed by a KfW loan and co-financing from the Government of the Republic of Armenia. The total budget of the project is 95.2 million euros, including 68.5 million euros in borrowed funds. At the first stage, it is planned to build a reservoir with a total volume of 25 million cubic meters, with a further increase in the maximum volume of the reservoir to 60 million cubic meters. The construction will be carried out by the Chinese company Shanxi Construction Investment Group. At the first stage, the water supply level of the Shirak main and Akhuryan right-bank canals and about 17,000 hectares of land under their management will be increased. In addition, it will be possible to replace mechanical irrigation of 2,280 hectares of land with gravity irrigation, which will save 1.3 million kWh of electricity annually. With a reservoir volume of 60 million cubic meters. it will be possible to increase the area of irrigated land in the Shirak region by another 920 hectares, and in the Talin district of the Aragatsotn region, to replace mechanical irrigation of about 6,600 hectares of land with gravity irrigation, which will save 11.0 million kWh of electricity annually. The program is being implemented by the Territorial Development Fund of Armenia.
