ArmInfo. Armenia is amending the Financing Agreement for the "Armenia - Development of Irrigated Agriculture in the Ararat and Armavir Regions" project. The proposal to sign Addendum No. 3 to Financing Agreement No. CAM 1002 06 D dated April 23, 2020, between the Republic of Armenia and the French Development Agency was approved by the Cabinet of Ministers on February 12.
As stated in the explanatory note to the document, a number of objective factors were identified during the Project implementation that significantly impacted the schedule for the implementation of planned activities. Practical implementation of the Project actually began later than planned, which reduced the period available for effective implementation. The processes of selecting, concluding contracts, and mobilizing international short-term experts by the Project Operator required more time than originally planned, delaying the completion of a number of key analytical and methodological work. Furthermore, objective problems were also identified in the water sector: the process of concluding contracts with the second operator took longer than expected, and limited access to irrigation water in the target areas hampered fieldwork.
The above-mentioned factors directly impacted the main components of the Project, including the formation and development of farmers' cooperatives, support for cooperatives and farmers' groups, and the implementation of the Project's financial instruments (co-financing grants, collateral fund, cooperative development fund, land consolidation fund).
Of particular importance among the key prerequisites for the successful implementation of the Project is the construction of the Vedi Reservoir, which will provide water supply to farmer irrigation networks in the target areas of the Ararat region of the Republic of Armenia. Delays in the construction of the Vedi Reservoir and the incomplete operation of the associated infrastructure have become a significant obstacle to the introduction of modern irrigation systems, the creation of demonstration sites, and the stimulation of farmer investment activity. In the above circumstances, the proposed measures under Amendment No. 3 to the Financing Agreement, which provide for an extension of the Project implementation period until December 19, 2027 and the deadline for the use of funds until March 31, 2028, are aimed at ensuring the full implementation of the Project, taking into account the existing objective constraints and new realities that have arisen during its implementation," the draft decision states.
ArmInfo previously reported that the French Development Agency (AFD), in partnership with the EU, will provide Armenia with a ?10 million grant under the "Development of Irrigated Agriculture in the Ararat and Armavir Regions" program. The program is designed for three years (2018-2020). The funding will be used to implement drip irrigation systems, establish intensive orchards, process fruit crops, lay secondary irrigation canals, and consolidate land. The goal of the "Development of Irrigated Agriculture in the Ararat and Armavir Regions" project is to support the development of modern irrigation through technical assistance and investment: removing barriers related to access to reservoirs, developing irrigation infrastructure, land consolidation, advisory services, and loans. The project consists of a technical assistance component (?4.4 million) and an investment grant component (?5.6 million). The program will be implemented by the RA Ministry of Economy (agricultural sector - ?8.5 million) and the Armenian Territorial Development Fund of the RA Ministry of Territorial Administration and Infrastructure (irrigation sector - ?1.5 million). It consists of three main components, each with its own subcomponents: institutional support for national and local beneficiaries engaged in irrigated agriculture; improvement of irrigated agricultural production; and communications and project management costs.
The program is expected to modernize irrigation infrastructure over an area of 2,000 hectares and establish at least 20 production cooperatives and farmer groups. Ten land consolidation activities will also be implemented.
This program is interconnected with another project also funded by the AFD - the Vedi Reservoir Construction Program. The program aims to consolidate several communities in the Ararat region adjacent to the Vedi Reservoir, which is currently under construction and where a drip irrigation system is planned. The reservoir's construction should ensure reliable irrigation of 7,500 hectares of land in the Ararat Plain. It is expected that the implementation of both programs will resolve the issue of irrigation for agricultural land in the region.
French Development Agency (ADF) was founded in 1998 and operates the bilateral development financial mechanism of the French Republic. Under the jurisdiction of the French Ministries of Foreign Affairs, Economy and Finance, Overseas Territories, and the Interior, the AFD is a government-run trade and industry agency that combats poverty and promotes economic growth in both developed countries and the French Overseas Territories. On December 18, 2025, the French Development Agency (AFD) opened its new office at the Yerevan Plaza Hotel. The AFD Group, present in Armenia since 2013, finances projects that contribute to the fight against climate change and work towards a just and inclusive transition. The agency supports the sustainable management and conservation of natural resources, the energy transition, public financial management, and urban services. Since 2013, AFD has allocated ?555 million in loans and approximately ?30 million in assistance to Armenia, of which ?23.5 million was provided by the European Union.
