ArmInfo. At its October 1 meeting, the Armenian government approved the signing of an agreement on the opening of a credit line for Armenia by the French Development Agency (Agence Française de Développement).
The rationale for the draft decision states that the credit line for Armenia will be opened for budget support purposes. It is the first subproject implemented under a new three-year program,
co-financed by the ADF and the Asian Development Bank (ADB), which is a continuation of previously implemented budget support programs based on government policy on public finance management and financial market development. The funds will be used to ensure responsible public financial management that promotes high-quality and sustainable public spending and investment, reduce Armenia's dependence on external financing by strengthening domestic resource mobilization, and create a more favorable business environment.
The program has three main reform areas: improving fiscal and budgetary management, public financial management, and public service delivery at the national and subnational levels; creating an enabling environment for domestic resource mobilization, developing linkages and the private sector; and promoting sustainable financing by improving debt management and enhancing the efficiency of financial markets.
Budget support funds will be used to finance the deficit defined by the Law of the Republic of Armenia "On the State Budget of the Republic of Armenia for 2026." Therefore, timely disbursement of loan funds is crucial for financing expenditures under the state budget categories.
ADB will cofinance the program in the amount of up to $250 million. The loan amount will be disbursed in a single payment, with the borrower having the option of choosing a floating or fixed interest rate for each payment. The floating interest rate is equal to the 6-month EURIBOR rate (or, if unavailable, the corresponding base interest rate) plus a 2.3% margin, which is fixed in the agreement. Taking into account the 6-month EURIBOR interest rate set on September 11, 2026, which is 2.820%, the floating interest rate on the loan will be 5.120%. A fixed interest rate may be chosen for loan applications of €3 million or more. It may not be less than 0.25%. At the same time, in each withdrawal application, the borrower may indicate the maximum interest rate acceptable to him, and if the interest rate calculated on the interest rate determination date exceeds the maximum interest rate indicated in the application, the application is considered canceled.
