The World Bank will provide Armenia with a EUR 70.4 million loan for the implementation of the "Water Supply and Irrigation Systems Improvement. Phase 1" program. At its February 26 meeting, the Committee on Financial, Credit, and Budgetary Affairs of the National Assembly of the Republic of Armenia approved the draft agreement with the Bank submitted by the Government of the Republic of Armenia.
According to Aramazd Ghalamkaryan, Chairman of the RA Water Committee, the Republic of Armenia and the International Bank for Reconstruction and Development, a WB subsidiary, signed the relevant loan agreement on September 11 and 18, 2025. According to the document, the Bank will provide ?70.4 million to the Republic of Armenia to finance the project, and the Government of the Republic of Armenia will co- finance taxes, duties, operating expenses related to the program, and other costs not eligible for financing by the loan. The agreement is valid for 180 days from the date of signing, and the project is valid for five years from the effective date. The effective date of the Cofinancing Agreement is March 31, 2026.
The project consists of the following main components: water sector reform and institutional strengthening of climate-resilient irrigation and water supply systems in rural areas, improvement of rural water supply and sanitation, modernization of irrigation infrastructure and system management, and project management. The project is also expected to be cofinanced by the French Development Agency (Agence Francaise de Developpement) in the amount of $185 million. Over the next 10 years, total financing will amount to $435 million, the lion's share ($330 million) of which will come from the IBRD. Given the multifaceted and interconnected nature of the challenges facing Armenia's water sector, including deteriorating irrigation infrastructure, limited access to safe water for rural populations, and growing risks associated with climate change, the proposed project aims to apply an integrated, multi-phased approach to ensure sustainable development and effective management of the sector. The project is a logical continuation of previous World Bank-financed initiatives and will ensure the implementation of necessary policy, institutional, and infrastructure reforms.
The project is expected to result in the introduction of climate-resilient irrigation and water supply systems that will contribute to economic growth, food security, and balanced regional development.
The first six-year phase of the program will be implemented by the Water Committee of the Ministry of Territorial Administration and Infrastructure of the Republic of Armenia in settlements in the Ararat, Armavir, Kotayk, Aragatsotn, Shirak, and Tavush regions. The initiative aims to modernize infrastructure and strengthen institutions regulating the water sector, in line with Armenia's commitments to reduce greenhouse gas emissions and improve adaptation to extreme weather events. According to the source, approximately 650,000 people in 579 rural settlements in Armenia remain without access to centralized water services because they live in areas not covered by lease agreements for water supply. The project will also contribute to improving the governance structure of water user associations, including through the involvement of women.
As a reminder, since 1992, the World Bank has provided the country with approximately $3 billion, including investment loans, grants, analytical support, and technical assistance. The current portfolio of the IBRD, trust funds, and the International Development Association (IDA, a World Bank entity) amounts to approximately $400 million. Since 2023, Armenia has also become an IDA donor country.
