Related PDF

PUTIN S INFORMATION WARFARE IN UKRAINE
m ari a s negovaya russia report 1 putin s information warfare
cumulonimbus clouds - Georgia Institute of Technology
duplicatus undulatus fibratus nebulosus Cirrostratus undulatus lacunosus stratiformis lenticularis castellanus floccus Cirrocumulus intortus radiatus
INTENTIONALLY LEFT BLANK - Defense Intelligence Agency
IV PREFACE For more than 50 years DIA officers have met the full range
Key Components of a Well Functioning Health System
Key components of a well functioning health system A well functioning health system responds
5. Past Progressive - Estrella Mountain Community College
Past Progressive Tense VS Simple Past Tense Directions Read each situation below and answer
Clinical Pharmacology Data to Support a Demonstration of
This guidance is intended to assist sponsors with the design and use of clinical
Agile IT Organization Design: For Digital Transformation
Praise for Agile IT Organization Design Continuous delivery is often described
Oracle E-Business Suite Release Roadmap
Roadmap Update Thousands of organizations around the world rely on Oracle E Business Suite to
OECD Principles for Integrity in Public Procurement
ORGANISATION FOR ECONOMIC CO OPERATION AND DEVELOPMENT The OECD is a unique forum where the
Federal Land Ownership: Acquisition and Disposal Authorities
Federal Land Ownership Acquisition and Disposal Authorities Congressional Research Service Summary The federal government
asbestos essentials - Health and Safety Executive
Health and Safety Executive 1 of 2 pages What this sheet covers This sheet
Going home with C. difficile - Hamilton Health Sciences
Going home with C difficile _____ 4 H amilton Health Sciences and
TOEFL Speaking Rubrics - Educational Testing Service
Integrated SPEAKING Rubrics TOEFL iBT Test SCORE GENERAL DESCRIPTION DELIVERY LANGUAGE USE
Testing and Assessment: An - O*NET Resource Center
1 2 1 Personnel assessment tools tests and procedures Any test or procedure used to
CIMA CODE OF ETHICS
1 CIMA CODE OF ETHICS FOR PROFESSIONAL ACCOUNTANTS CIMA CODE OF ETHICS FOR PROFESSIONAL
Elements of Poetry - University of New Mexico
Elements of Poetry Alliteration is a repetition of the same consonant sounds in a
Grade 8 ELA Standards -
8th Grade English Language Arts Georgia Standards of Excellence ELA GSE Georgia Department of
A Great Tradition from Louisiana to Texas Floyds Cajun
A Great Tradition from Louisiana to Texas Floyds
Federal Firearms Regulations Reference Guide 2014 -
NOTICE OF CORRECTIONS March 7 2015 On January 15 2015 ATF posted the 2014
Military expenditure by country, in constant (2016) US$ m
Figures are in US m at constant 2016 prices and exchange rates except for
Email Statistics Report, 2014-2018 EXEC SUMMARY
the radicati group inc a technology market research firm palo alto ca usa tel
nginEEring by thE numbErs - American Society for
EnginEEring by thE numbErs By Brian L Yoder Ph D bachElor s DEgrEEs
Gods of Eden - William Bramley - WHALE
2 William Bramley very popular in my circle of friends Our favorite game was
Lord of the Flies -
The fair boy said this solemnly but then the delight of a realized ambition
BRITAIN AND THE SLAVE TRADE Early British slaving voyages
BRITAIN AND THE SLAVE TRADE Early British slaving voyages John Hawkins is considered
SOCIALIZATION AND GENDER ROLES W ITHIN THE FAMILY: A STUDY
SOCIALIZATION AND GENDER ROLES W ITHIN THE FAMILY A STUDY ON ADOLESCENTS AND THEIR
Rewarding Our Partners - Starbucks Coffee Company
Benefits Starbucks prides itself on our partners We offer partners working full time or part time
SINGAPORE ENERGY STATISTICS 2015 - EMA : Home
2 3 TABLE OF CONTENTS Singapore Energy Statistics 2015 TABLE OF CONTENTS Singapore Energy
Review of the Issuance Process for Notice 2018-54
Ben Franklin Station Washington D C 20044 0589 Information you provide is confidential and
Standard Speci cation for Seamless, Welded, and Heavily
Designation A 312 A 312M 04a Used in USDOE NE standards Standard

Popular PDF

COUNTRY PROGRAM SNAPSHOT - World Bank

3 concentration is not high and further consolidation of the banking sector is expected during 2015 16 in response to the CBA s capital

Insert your error message here, if the PDF cannot be displayed.



File type: PDF

File size: 1,03 MB

File name: Armenia-Snapshot.pdf


	33
 
 
 
 
Contact Info:
 
9 G. Lousavorich Street
 
Yerevan 0015, Armenia
 
WB Tel.: +37410 520
-
992     
 
 
 
IFC Tel
.: +37410 545
-
241
 
WB Fax: +37410 521
-
787       
 
 
IFC Fax: +37410 545
-
245
 
              
www.worldbank.org/en/country/armenia
 
 
      
www.ifc.org/armenia
 
 
 
32
 
 
 
 
ARMENIA: BANK ADVISORY PROGRAM IN EUROPE AND CENTRAL ASIA (2009
–
15)
 
 
Donor partners
:
 
th
e Development Bank of Austria and the Swiss State Secretariat for Economic Affairs 
 
 
The Challenge
:
 
The Europe and Central Asia region was among the hardest hit by the global financial crisis, and many financial 
institutions remain vulnerable to further in
stability and lack the confidence to restart lending to the
 
micro, small, 
and medium
-
sized enterprise (
M
SME
)
 
sector in particular. This is a byproduct of insufficient knowledge of best 
practice 
M
SME lending skills and a limited understanding of how to mana
ge risk and high rates of nonperforming 
loans
 
(NPLs)
. 
 
 
The IFC Approach
:
 
The program provides in
-
depth advice to help financial institutions reduce NPLs, improve risk management, 
and 
increase lending to 
M
SMEs
. It also supports the development of a market 
for distressed assets, increases awareness 
of best international practices 
in risk and NPL management, 
and supports the development of 
M
SME banking 
with 
a focus on gender finance
.  
 
 
Results 
achieved 
to date
:
 

 
The project has helped clients in Europe and Ce
ntral Asia release more than 
US
$51 million for new 
lending and facilitated a further 
US
$17 million in new financing to clients.
 
 
 
ARMENIA:
 
SUSTAINABLE
 
ENERGY
 
FINANCE
 
PROJECT
 
(2009
–
15)
 
 
Donor partner:
 
the Ministry of Finance
 
of Austria
 
 
 
The Challenge
:
 
Des
pite good land and water resources, Armenia imports around two
-
thirds of its energy. Obsolete power 
generation equipment and minimal investment in renewable energy, particularly in small hydropower plants, are the 
major barriers to greater energy efficienc
y.
 
The Armenian industrial sector could save up to 14.5 percent of its 
energy costs by improving energy efficiency. Several international financial institutions are providing energy
-
efficiency financing opportunities directly and through local financing in
stitutions, yet significant potential remains 
untapped. This is mainly due to the affordability of existing financing and low awareness among Armenian 
companies of the potential for operational cost savings through energy
-
efficiency investments.
 
 
 
The IFC 
Approach
:
 
The IFC Armenia Sustainable Energy Finance Project aims to establish a sustainable market for investments in 
energy efficiency and renewable energy. The project works with local and international financial institutions to 
develop Armenia’s energy
 
self
-
sufficiency.
 
 
Results 
achieved to date: 
 

 
IFC invested 
US
$55 million in energy efficiency and renewable energy financing through local banks; 
 

 
Over 40 megawatts of new renewable power generation capacity install
ed through client investments;
 

 
Over 125 
gigawatt hours
-
per
-
year increase in renewable energy generation through client investments;
 

 
More than 35 gigawatt hours of energy saved each year.
 
 
31
 
 
regulations, and other tools. 
 
 
Expected Results
:
 

 
The program aims 
to support
 
its partners in Europe and Central Asia 
to 
raise 
US
$180,000 in sales revenue 
thro
ugh corporate governance work, to improve the performance of 32 companies through corporate 
governance improvements
,
 
and 
to 
help 24 companies access financing totaling 
US
$100 million.
 
 
 
R
ESOURCE EFFICIENCY PROGRAM IN EUROPE AND CENTRAL ASIA
 
(2010
–
15)
 
 
Don
or partner:
 
the Ministry of Finance of Austria
 
 
Challenge:
 
The efficient use of
 
energy, raw materials, and water along a company’s value chain not only helps conserve 
resources and reduce waste, pollution, and greenhouse gas emissions, but also reduces ope
rating costs. Yet many 
firms in Europe and Central Asia remain unaware of the potential cost savings and environmental benefits. As a 
result, firms are reluctant to invest the upfront costs needed to identify
 
and take advantage of resource
-
efficiency 
oppor
tunities. 
 
 
The IFC Approach:
 
 
The program works at the firm and sector levels to stimulate investment in resource
-
efficient technologies and best 
practices, improve management and operational practices across industries, raise awareness among policy maker
s 
and financial institutions, and drive market transformation through sector studies, such as
 
benchmarking and 
assessment tools.  
 
 
Expected Results:
 

 
The program aims to facilitate
 
the
 
investment of 
US
$90 million and reduce carbon dioxide emissions by 
120,
000 tons of CO
2
 
e
quivalent
 
annually in Europe and Central Asia. 
 
 
 
A
GRIBUSINESS STANDARDS ADVISORY PROGRAM IN EASTERN EUROPE AND CENTRAL 
ASIA
 
(2013
–
16)
 
 
Donor partner:
 
The Ministry of Finance of Austria 
 
 
The Challenge
:
 
The agribusiness industry is a vita
l contributor to the economies of Europe and Central Asia. However, inadequate 
food safety standards keep the region’s agribusiness industry from advancing, while food companies are shut out of 
the modern food value chains, potentially aggravating global f
ood security. 
 
 
The IFC Approach
:
 
The IFC 
p
rogram assists local companies in applying food safety standards throughout the agribusiness value chain 
while also strengthening the capacity of local consultants. Improved standards will help agribusiness firms 
meet 
regional and export market requirements while building a foundation to mobilize investments and help the 
agribusiness industry realize its full potential.  
 
 
Expected Results
:
 
The IFC Program is expected to: 
 

 
increase the number of companies with food
 
safety management systems in place, boosting their 
 

 
facilitate an increase in domestic and export sales by client companies;
 

 
facilitate investments as a result of improved food safety ma
nagement; 
 

 
build capacity among local consultants and firms; 
 

 
create a demonstration effect for how to do business more sustainably, across the region and globally.
 
 
 
30
 
 
 
IFC ADVISORY SERVICES PROJECTS 
 
WORLD BANK GROUP
 
 
ARMENIA: INVESTMENT CLIMATE REFORM PROJECT II (2014
–
17)
 
Donor Partners:
 
Hungarian Partnership Funding/Hungary EXIM Bank and the
 
Ministry of Finance of 
Austria 
 
Challenge:
 
The World Bank Group has identified the promotion of sustainable growth and productivity as a pillar for 
economic an
d social development in Armenia
 
investment climate. The Ar
menia Investment Climate Reform Project is part of this effort. A previous Investment 
Climate Reform Project implemented in 2011
–
14 helped the Government of Armenia design and adopt framework 
reforms in inspections, trade logistics, food safety, and tax. H
owever, some areas need further improvements. 
Enhanced transparency, a stronger investment policy, and a reformed inspection process will boost private sector 
growth and job creation by increasing investment and decreasing the costs for doing business, par
ticularly in the 
agribusiness sector. 
 
 
The Project Approach
:
 
 
The Armenia Investment Climate Reform Project II will provide specialized advisory services to the 
G
overnment 
in the areas of investment policy and inspections reform. The aim is to promote con
fidence and transparency, 
strengthen effectiveness and compliance, and accelerate private sector growth by creating simple, efficient, 
and 
business
-
friendly regulations while ensuring 
that 
public interests are protected.
 
 
Project Objective:
 
The Armenia Inv
estment Climate Reform Project II has two main objectives: 
(a) 
i
mprove investment policy by 
enhancing the current framework in terms of investment entry, protection, and the transparency and gove
rnance of 
investment incentives; and (b) 
r
eform business insp
ections by improving the system and enhancing regulatory 
certainty and efficiency.
 
 
Expected Results:
 

 
Generate new investment, especially in the agricultural sector;
 

 
Increase the accessibility and quality of 
the 
implementation of investment policy;
 

 
Improve
 
the inspections system with a focus on regula
tory certainty and optimization
;
 

 
Achieve compliance cost savings for the private sector through an improved inspections system;
 

 
Increase the confidence and trust of businesses in the inspections system.
 
 
C
ORPO
RATE GOVERNANCE PROGRAM IN EUROPE AND CENTRAL ASIA 
(2012
–
15)
 
 
Donor partners:
 
the Swiss State Secretariat for Economic Affairs (SECO) and the Development Bank of Austria 
(OeEB).
 
 
Challenge
:
 
Good corporate governance assists companies and financial institut
ions
 
in
 
enhanc
ing
 
their sustainability, access 
to 
capital, and performance. Yet many companies and financial institutions in Europe and Central Asia lack the 
knowledge and experience necessary to strengthen their governance practices so as to 
realize
 
the r
eal benefits such 
practices can bring. Local consultants and institutions also lack the skills needed to help businesses improve their 
corporate governance. In addition, the corporate governance framework in many countries is in need of further 
enhancement
.
 
 
The IFC Approach
:
 
The program provides in
-
depth advice to companies and financial institutions on implementing good corporate 
governance practices, strengthens the capacity of local partner institutions to deliver director
-
focused training and 
corporate
 
governance services, and contributes advice on the corporate governance aspects of laws, codes, 
29
 
 
 
 
 
ARMENIA: HELPING AMERIABANK FINANCE RENEWABLE ENERGY PROJECTS
 
Key Dates:
 
Approved: 
Decem
ber 18, 2009
 
Signed: 
December 22, 2009 
 
IFC financing (in US dollars):
 
Financing Type
 
Amount
 
Fiscal Year 
(starts in July)
 
Loan 
 
15 million
 
2010
 
 
 
 
 
 
Challenge:
 
Armenia has no fossil fuel resources and relies heavily on energy imports. Underinvestment i
n renewable energy 
projects, particularly in small hydropower plants, is one of the major barriers to greater energy self
-
sufficiency. At 
the same time, long
-
term funding is scarce in Armenia.
 
 
Project Objective:
 
Ameriabank, one of Armenia’s strongest and 
most innovative banks, is seeking to pioneer local renewable energy 
financing. IFC has lent the bank US$15 million for a series of smaller, green subloans. Related advisory services 
from the IFC Armenia Sustainable Energy Finance Project helped the bank’s 
staff learn to develop sound 
sustainable energy finance products. 
 
 
The project has enabled the bank to provide long
-
term financing for small hydropower plants, which has helped 
increase Armenia’s domestic electricity production, diversify its electricity 
supply, and decrease its reliance on fuel 
imports. This has boosted the supply of renewable energy and cut greenhouse gas emissions.
 
Key results: 
 
IFC’s US$15 million loan, together with advisory support from the IFC Armenia Sustainable Energy Finance 
Pro
ject, has helped Ameriabank finance the construction of 12 small hydropower plants. They have a total installed 
capacity of 40.1 megawatts and generate 124.91 gigawatt hours per year. They prevent the release of nearly 50,000 
tons of carbon dioxide, or its
 
equivalent, per year.
 
28
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ARMENIA:
 
TRADE
 
PROMOTION
 
AND
 
QUALITY
 
INFRASTRUCTURE
 
PROJECT
 
Key Dates:
 
Approved: 
July 2, 2014
 
Effective: 
January 14, 2015
 
Expected 
Closing: 
June 
30, 2020
 
Financing in million US Dolla
rs
:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
*
 
IBRD
 
Government 
of Armenia
 
50.0
 
9.5
 
                      
 
0.12
 
49.88
 
Total 
 
59.5
 
 
 
*World Bank disbursements as of 
April
 
2015.
 
Note: Disbursements may differ from financing due to exchange rate 
fluctuatio
ns at the time of disbursement.
 
 
Challenge:
 
 
Armenia has had a relatively low export base and 
seen 
a 
declin
ing
 
sophistication 
in
 
export products over the years, while 
its 
export basket 
is 
primarily concentrated in commodities 
that
 
have low
 
value added an
d are vulnerable to volatility in global 
markets
. 
Another
 
challenge is to attract efficiency
-
seeking 
foreign direct investment (
FDI
)
 
to maximize benefits to the local 
economy. Furthermore, while the requirements to meet global quality standards are more cr
ucial to promote products and 
services, Armenia’s national quality infrastructure suffers from weaknesses that hinder technology upgrading and undermine 
 
 
The 
Project Development Objective
 
is
 
to strengthen the G
overnment
’
s capacity to provide export promotion, investment 
attraction
,
 
and quality management services to firms.
 
Key e
xpected 
results:
 

 
At least 40 contracts with new customers for exporters 
will be
 
generated through newly established foreign 
representatives of 
th
e 
Armenian 
Development Foundation (
A
DF
)
;
 

 
Seven
 
facilities 
in the form of
 
public private partnerships
 
(PPPs) will be
 
created to strengthen industry clusters 
(
c
luster 
development
 
PPPs) and to facilitate efficiency
-
seeking FDI to strengthen their level of eng
agement in 
Armenia and facilitate skills development by funding joint projects between multinationals and academia (
research
 
and skills 
development
 
PPPs)
;
 

 
Four
 
new FDIs 
will be
 
generated through the services provided by
 
A
DF
;
 

 
Two
 
Industrial Laboratories of 
the National Institute of Metrolo
gy 
will be
 
international
ly
 
recognized
;
 

 
A 
National Accreditation Body 
will 
obtain
 
international recognition
;
 

 
The project 
will 
support
 
the training of technical staff of 
the 
national quality infrastructure
.
 
 
 
Key partners: 
T
he Bank works closely with the Ministry of Economy (MoE), which is responsible for the overall 
implementation of the project, 
the 
Project Management Unit (PMU) within the MoE, which 
is 
charged with coordination 
and management of implementation activities o
n a day
-
to
-
day basis, and 
the 
Foreign Financed Projects Management Center 
(FFPMC), which 
is 
responsible for the fiduciary aspects of project activities.
 
 
27
 
 
 
ARMENIA: SOCIAL INVE
STMENT FUND III
 
Key Dates:
 
Approved:
 
October 26, 2006
 
Closed: 
March 31, 2012
 
 
First Additional Financing Closed: 
June 30, 2011
 
Second Additional Financing Closed: 
October 31, 2012
 
Third Additional Financing Clo
sing: 
March 31, 2015
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
IDA Credit
 
IDA Credit
 
IBRD Loan
 
IDA Credit
 
Government of 
Armenia
 
Communities
 
Sponsors
 
25.00
 
8.00
 
7.00
 
11.00
 
12.4
 
 
3.8
 
0.4
 
26.10
 
8.00
 
7.00
 
10.82
 
 
0.00
 
0.00
 
0.0
0
 
0.00
 
Total
 
67.6
 
5
1
.92
 
 
*World Bank disbursements as of 
April
 
2015
.
 
Note: Disbursements may differ from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
 
 
Challenge:
 
 
 
Notwithstanding infrastructure investments in recent years
, 
major local social infrastructure gaps have 
remained, largely reflecting 
years of neglect in maintenance. Social infrastructure gaps have been most acute in the rural areas. 
Another main challenge was 
improving the living standards of the poor as, despit
e the strong economic growth before the crisis, Armenia was facing critical 
vulnerabilities
,
 
stemming from the global economic and financia
l crisis. T
hree Additional Financings were provided to support 
small
-
scale infrastructure investments that also helpe
d generate employment and mitigate the impact of the crisis by supporting 
activities that can be quickly and effectively scaled
 
up and implemented under the existing project.
 
 
The 
Project Development Objective
 
is to support the Government’s policy to raise
 
the living standards of poor and vulnerable 
groups through: (i) improving the quality, access, and coverage of community services and infrastructure in poor communities;
 
(ii) 
promoting complementary institutional capacity building at the community and mun
icipal level so as to improve the quality and 
sustainability of community investments and service delivery, increase accountability, and enhance greater stakeholder 
empowerment at the local level; and (iii) creating employment associated with the provision
 
of community infrastructure and 
services. 
 
Key results achieved: 
 

 
320 community infrastructure microprojects were completed with 637,098 job
-
days of employment created and US$10.7 
million in wage income. The total number of beneficiaries of completed mic
roprojects is estimated at about 1.7 million, 
almost half of Armenia’s population
.
 

 
The largest share of the completed microprojects belongs to schools (41 percent), followed by community and cultural centers 
(28 percent), kindergartens (14 percent), health
 
care facilities (7 percent), and potable water supply systems (5 percent)
.
 

 
The b
eneficiary communities were
 
selected based on their poverty ranking. The poverty mapping and ranking methodology 
was dev
eloped under the project for 91
5
 
communities (866
 
rural
 
and 49
 
urban) and was last updated in December 2011
.
 

 
Over 5,200 local community members (355 communities) received training on investment planning and management, and 716 
municipal officials from 145 communities received training on financial management
.
 

 
The Government
,
 
with World Bank support
, developed
 
an Armenian Social Investment Fund (ASIF) evolution strategy and 
approved it in March 2014. As of April 1, 2015, ASIF 
was
 
transformed into 
the
 
Armenian 
Territorial Development Fund
.
 
Key partners: 
The Bank
 
team worked closely 
with the (i) 
Ministry of Territorial Administration
 
and Emergency Situations
 
responsible for the overall policy 
setting and
 
implementation support; (ii) 
Ministry of Finance
;
 
and (iii) 
Ministry of Labor and 
Social 
Affairs
, 
involved in p
olicy dialogue and providing implementation support. 
 
Key development partners
 
included the United Nations High Commissioner for Refugees (
UNHCR)
, Swiss Agency for 
Development and Cooperation (SDC)
,
 
All Armenia Fund
, Armenian General Benevolent Union (
AGBU
), Aznavour pour 
l’Armenie (
APA
), 
IFAD
, and Kni
ghts
 
of Var
t
an 
(KoF)
.
 
26
 
 
 
 
ARM
E
NIA: SOCIAL 
PROTECTION ADMINISTR
ATION PROJECT II
 
Key Dates:
 
Approved:
 
March 
2
4
, 20
14
 
Effective: 
October 2
9, 2014 
 
Closing: 
December 31, 2018
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
IDA Credit
 
Government 
of Armenia
 
 
21.20
 
4.30
 
 
0.00
 
0.00
 
 
21.20
 
4.30
 
 
Total
 
25.50
 
 
 
*World Bank disbursements as of 
April
 
201
5
.
 
Note: Disburse
ments may differ from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
      
 
Challenge:
 
The i
mprove
ments in
 
living conditions witnessed in the country before the 
2009 
global financial crisis 
have since
 
reversed
,
 
with increased i
nequality and more 
instances of 
people falling below the poverty line. In post
-
crisis Armenia
,
 
improvements in living conditions have 
remained
 
slow, renewing
 
the
 
Government’s focus on the efficiency 
of the social service 
delivery system
 
and effectiveness o
f the Family Benefit Program. The
se
 
efforts need further enhancement to cope with protracted 
and high unemployment, poverty
,
 
and vulnerability
,
 
which disproportionately affect women.
 
The 
Project Development Objective
s
 
are to (i) improve social protection s
ervice delivery and (ii) strengthen 
the 
analytical and 
monitoring and evaluation functions of the agencies delivering social protection benefits and services. 
 
 
Key expected results: 
 
 

 
The project will support the model of 
the 
functional integration of fo
ur existing agencies responsible for pensions, social 
assistance, employment
,
 
and disability certification
.
 

 
This
 
model will be rolled
 
out to another 37 Integrated Social Protection Centers. The activities, from civil works to 
furniture and IT equipment wit
h software provision, as well as trainings and on
-
the
-
job mentoring along with a proactive 
communication with the public, will ensure the fully operational nature of the centers, delivering high
-
quality services 
tailored to 
the needs of the beneficiaries
.
 

 
Among 
the 
beneficiaries, this project will also target
 
the
 
registered unemployed and employers by promoting employment 
intermediation and employer
-
employee matching, thereby increasing labor market efficiency and job opportunities
.
 

 
Implementation of the Go
vernment’s New Employment Strategy will come in a number of ways, such as by 
providing 
capacity building of the state employment agency via trainings and modernized IT infrastructure
 
and
 
expanding career 
orientation through skills
-
tailored distance learnin
g programs. It is expected that about 1
,
400 men and women will benefit 
 
equally 
from this orientation program, along with 700 
who are
 
enrolled in 
the 
Youth without Education and Skills 
Program
.
 

 
The project will
 
finance an integrated system of monitoring an
d evaluation of social protection benefits and services, 
targeting over 70 different programs. This would enable the Ministry of Labor and Social Issues to directly manage the 
beneficiary feedback, specifically collecting information on 
the 
quality of de
li
vered services.
 

 
The 
project
 
will support the State Social Security Service in improving and upgrading its core business processes.
 
A risk
-
based fraud
-
and
-
error supervision software and system
,
 
along with improved human resource management capacity, such 
as
 
central payment services for the integrated social delivery system, will be developed and made fully operational. In 
addition, it is expected that by the end of the project
,
 
the average time required for processing a pension case would 
decrease by 
three
 
t
imes.
 
Key partners: 
The Bank works closely with the Ministry of Labor and Social Issues, as well as with its detached unit
, the
 
State 
Employment Service Agency. 
 
 
 
Key development partners
 
involved in different components of the social protection reform a
re UNICEF and USAID.
 
25
 
 
 
ARMENIA:
 
EDUCATION
 
IMPROVEMENT
 
PROJECT
 
Key Dates:
 
Approved: 
March
 
1
3, 2014
 
Effective: 
November 20, 2014
 
Closing: 
Septe
mber 30, 201
9
 
Financing 
in million US Dollars
:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
*
 
IDA Credit
 
IBRD
 
Government 
of Armenia
 
15.00
 
15.00
 
7.50                      
 
0.5
 
0.5
 
 
13.33
 
14.5
 
Total 
 
37.50
 
 
27.83
 
*World Bank disbursements as of 
April
 
2015.
 
Note: Disbursements may d
iffer from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
 
Challenge:
 
Since 1990, continued investment in education has been aimed at the reduction of poverty by increasing access to, and 
improving the quality of, general secon
dary education. The current project addresses the challenge of sustaining and 
extending the accomplishments in general secondary education and at the same time, addressing equity and quality concerns 
in both preschool and tertiary education.
 
 
The 
Project D
evelopment Objectives 
of the Education Improvement Project focus on: (i) improving 
the 
school readiness 
of children entering primary education
;
 
(ii) improving physical conditions and the availability of educational resources in 
upper
-
secondary schools; and
 
(iii) supporting improved quality and relevance in higher education institutions in Armenia.
 
 
Expected k
ey results:
 

 
About 120 new grant microprojects 
will be 
awarded to poor communities in Armenia to support preschool 
expansion benefiting about 2,500 chi
ldren.
 
Children who benefit from preschool
 
are projected
 
to 
scor
e
 
9
–
13 percent 
higher in the early development indicator
.
 

 
17 (out of 107) high schools in Armenia 
will be 
fully renovated and 
retrofitted 
with seismic stability to meet current 
construction 
an
d
 
safety standards.
 
This means about 225 classrooms 
will be 
renovated in these 17 high schools
.
 

 
All 107 high schools in Armenia 
will be 
equipped with up
-
to
-
date education resources provided by the project
.
 

 
An integrated education management information sys
tem for general and higher education 
will be 
fully operational 
and expanded nationwide.
 
About 4,000 staff 
will be 
trained to use the newly integrated system
.
 

 
At least 10 higher education institutions or consortium of universities 
will 
receiv
e
 
grants under 
the Competitive 
Innovation Fund to strengthen the relevance, quality
,
 
and efficiency of their academic programs
.
 
 
Key partners: 
The Bank team works closely with the 
Ministry of Education and Science, 
responsible for the overall policy 
setting as well as f
or the implementation of Bank
-
financed projects; and with the 
Ministry of Finance, 
responsible for 
deepening policy dialogue on the financial implications of the proposed project as well as for ensuring the proper flow of 
funds and financial monitoring of 
project activities. 
 
 
Key development partners 
include 
UNICEF and
 
the
 
Step
-
by
-
Step Foundation for the provision of p
reschool teacher 
training.
 
24
 
 
 
 
ARMENIA:
 
SECOND
 
EDUCATION
 
QUALITY
 
AND
 
RELEVANCE
 
PROJECT
 
Key Dates:
 
Approved: 
May 12, 2009
 
Effective: 
October 2, 2009
 
Closing: 
November 30, 2015
 
Financing in million US Dollars
:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
*
 
IDA Credit
 
Government 
of Armenia
 
25.00
 
6.26                      
 
21.1
 
 
  
4.6
 
 
Total 
 
31.26
 
 
 
*World Bank dis
bursements as of 
April
 
2015.
 
Note: Disbursements may differ from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
Challenge:
 
 
Since 1990, the continued investment in education has been aimed at the reduction of poverty by increas
ing access to, and 
improving the quality of, general secondary education. The current project addresses the challenge of sustaining and 
extending the accomplishments in general secondary education and at the same time, addressing equity and quality concern
s 
in both preschool and tertiary education.
 
 
The 
Project Development Objective 
of the second phase of the Education Quality and Relevance Project (EQRP) 
continues to focus on reform of the general secondary education system and addresses key policy issues 
in preschool and 
secondary and higher education through: (i) enhancing school learning in general education and improving the school 
readiness of children entering primary education; and (ii) supporting the integration of the Armenian tertiary education 
sy
stem into the European Higher Education Area. 
 
R
esults
 
achieved to date
:
 
 

 
337 preschool education microprojects benefiting over 8,000 students have been implemented since the beginning of the 
project (1
3,500 students since June 2008).
 

 
The project has supp
orted the t
raining of over 12,500 teachers.
 

 
Since January 2013, all public schools in Armenia are connected to the Interne
t with support from the project.
 

 
Internet speed for the network has been increased from 256 kilobytes to at least 3 mega
bytes.
 

 
1,360 s
chools have received hardware to support 
their administrative activities.
 

 
Resource centers combining library and computer labs have been established in 108 high schools. Training has been 
provided to 105 librarians, and 2,300 high school teachers have 
rece
ived subject
-
based training.
 

 
10
 
public and five private universities. From this, two public universities received pilot institutional and pilot 
program 
accreditation by an international accreditation agency (NVAO). 21 public and five private universities received grants to 
implement Internal Quality Assurance units
.
 

 
A 
t
ertiary 
e
ducation 
management information system (
M
IS
)
 
is in operation covering 
all vocational and 
higher educational 
institutions.
 

 
Implementation of 10 subprojects under the pilot Competitive I
nnovation Fund (CIF) is ongoing.
 

 
A long
-
term twinning arrangement took place between Armenia State Pedagogical University and Oulu University 
in 
Finland for technical assistance on reforming preservice teacher education.
 
Key partners: 
The Bank team works closely with the 
Ministry of Education and Science, 
responsible for the overall policy 
setting as well as for the implementation of Bank
-
finan
ced projects; and with the 
Ministry of Finance, 
responsible for 
deepening policy dialogue on the financial implications of the proposed project as well as for ensuring the proper flow of 
funds and financial monitoring of project activities. 
 
 
Key developme
nt partners 
include 
UNICEF,
 
which financially contributed to the project through preschool teacher 
training.
 
23
 
 
 
 
ARMENIA: DISEASE PRE
VENTION AND CONTROL 
PROJECT
 
Key Dates:
 
Approved: 
March 27, 2013
 
Effective: 
July 22, 2013
 
Closing: 
December 15, 2019
 
Finan
cing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
IDA Credit
 
Government 
 
Health Results
-
based 
Financing Trust Fund
 
35.00
 
 
8.20
 
 
1.80
 
  
5.57 
 
  
 
  
0.18
 
     
27.06
 
     
 
       
1.62
 
Total 
 
45.00
 
   
5.75
 
     
28.68
 
*World Bank disburse
ments as of 
April
 
201
5
.
 
Note: Disbursements may differ from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
Challenge:
 
 
Armenia today faces the 
dual challenge of the unfinished Millennium Development Goals (MDG) agenda and a rec
ord 
increase in 
non
communicable diseases (NCDs). 
The greatest burden of disease in Armenia, as in most European countries, 
comes from NCDs, a group of conditions that includes cardiovascular disease, cancer, mental health problems, diabetes 
mellitus, chron
ic respiratory disease, and musculoskeletal conditions.
 
 
The 
Project Development Objective
 
is to improve (i) maternal and child health (MCH) services and the prevention, early 
detection, and management of selected NCDs at the primary health care (PHC) leve
l; and (ii) the efficiency and quality of 
selected hospitals in Armenia.
 
R
esults
 
achieved to date
:
 
 

 
Training of about 2,700 
PHC
 
providers 
was
 
completed in 2014 during the preparation stage of population 
screening programs for cardiovascular disease, diabe
tes, and cervical cancer; 
 

 
85 percent of antenatal care 
(ANC) 
attendees screened for glycosuria, hypertension, and proteinuria in at least three 
antenatal visits;
 

 
60
 
percent of population aged 
40
–
74 
screened for hypertension at least once in the past year 
(by 
gender);
 

 
From 57 to 60 percent of population aged 
40
–
74 
screened for diabetes mellitus at 
the 
PHC level at least once 
during the past 
three 
years 
(by 
gender);
 

 
50 percent of women aged 
30
–
60 
screened for cervical cancer at least once during the past 
thr
ee 
years and received 
the results;
 

 
80 percent bed occupancy rate at the new Medical Center in Vanadzor; 
 

 
For 63 percent of MCH services and 66 percent of NCDs, the quality of care
 
was 
provided 
by 
doctors measured 
by 
clinical vignettes.
 
Key partners: 
The B
ank team works closely with the (i) 
Ministry of Health,
 
responsible for the overall policy setting and 
implementation of Bank
-
financed projects; (ii) 
Ministry of Territorial Administration, 
responsible for the programs on 
regional developments; (iii) 
Armen
ian Medical Association; 
and (iv) 
Ministry of Finance,
 
responsible for the Sustainable 
Development Program, as well as for mid
-
term expenditures, projections, and programmatic budgeting. 
 
 
Key development partners
 
include 
several international organization
s, in particular, WHO, 
UNICEF, 
World Vision, and 
Save the Children, which are involved in different components of health care reform undertaken 
by
 
the Government of 
Armenia.
 
22
 
 
 
ARMENIA: HEALTH SYST
EM MODERNIZATI
ON PROJECT 
 
Key Dates for APL2 and AF:
 
Approved: 
March 08
, 2007       
 
Effective: 
June 06, 2007
 
Closing: 
December 31, 2012    
 
Additional Financing Approved: 
January 26, 2011
 
Additional Financing Effectiveness: 
June 08, 2011
 
Additional Financing Closing: 
February 29, 2016    
 
Financing in million US Dollars:
 
Financier
 
 
Disbursed*
 
Undisbursed
 
IDA Credit
 
IBRD Loan
 
Government 
 
Armenian 
communities
 
Yerevan State Medical 
University
 
22.00
 
19.00
 
13.49
 
 
0.15
 
 
 
0.30
 
22.9
 
15.98 
 
 
 
    
0
 
    
3.02 
 
Total 
 
54.94
 
38.8
8 
 
     
3.02 
 
*
World Bank disbursements as of 
April
 
201
5
.
 
Note: Disbursements may differ from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
Challenge:
 
There is a concern that people may postpone seeking medical care because o
f a lack of resources, high out
-
of
-
pocket 
payments, which constitute about 55 percent of total health spending, and the perceived low quality of care, especially in 
rural areas. The main challenges in the health system are to ensure better access to health
 
services and to pursue a 
reallocation of the health budget toward primary health care (PHC).
 
The 
Project Development Objective 
of the APL2 and Additional Financing of HSMP is focused on (i)
 
completing the 
family medicine
–
based PHC reform (launched in 1996
) to ensure that every Armenian citizen will have access to a qualified 
and well
-
motivated family doctor and nurse of his/her choice; (ii) consolidating the hospital sector to minimize the waste of 
scarce resources and improve the quality of care; and (iii
) strengthening the Government’s competencies for effective 
stewardship in policy making, regulation, oversight, and public accountability.  
 
R
esults
 
achieved to date
:
 

 
 
1,676 physicians have been retrained as family physicians and 1,804 nurses retrained a
s family nurses. About 90 percent 
of the population is covered by retrained family medicine providers
.
 

 
Infrastructure of 94 PHC facilities has been improved (45 new constructions and 49 renovations) in rural areas.  
Construction of one new facility is curr
ently ongoing
.
 

 
200 PHC facilities were provided with a standard set of medical
 
equipment, supplies, furniture, and IT equipment
.
 

 
Space vacated as a result of the modernization of Yerevan hospitals was 15,577 square meters, and in the regions, 
74,888 square
 
meters
.
 

 
726 managers of hospital facilities participated in management training courses; as a result, 48 regional hospitals have 
trained key management personnel
.
 

 
Ten regional medical centers (MCs)
—
in the regions of Kotayk (population of 105,300), Tavush 
(49,200), Armavir 
(121,500), Ararat (95,300), Syunik (44,700), Aragatsotn (22,300), Geg
հ
arkunik (57,800), Alaverdi (14,000)
,
 
and Abovyan 
MC 
(
111,5
) as well as the new Gyumri Medical Center of the Shirak region (146,000)
—
were renovated and/or 
constructed
 
and provided with modern medical equipment and furniture. 
Four
 
regional medical centers a
re currently 
being renovated/constructed.
 
Key partners: 
The Bank team works closely with the (i) Ministry of Health, responsible for the overall policy setting and 
implementation of Bank
-
financed projects; (ii) Ministry of Territorial Administration, resp
onsible for the programs on 
regional developments; (iii) local authorities; and (iv) Ministry of Finance, responsible for the Sustainable Development 
Program as well as for mid
-
term expenditures, projections, and programmatic budgeting. 
 
Key development pa
rtners
 
include a USAID
-
funded project in the area of performance
-
based contracting. With the 
World Health Organization (WHO), the team collaborates in the development of Health Care Performance Assessment 
reports and a copayment strategy. The United Nation
s Children’s Fund (UNICEF) is a traditional partner in supporting the 
mother and child health (MCH) programs.  
 
21
 
 
 
 
 
 
 
 
 
 
 
 
ARMENIA: TAX ADMINIS
TRATION MODERNIZATIO
N PROJECT
 
Key Dates:
 
Approved: 
July 03
, 2012       
 
E
ffective: 
December 28, 2012
            
 
 
Closing: 
April 30, 2016    
 
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
IDA Credit
 
Government 
 
12.00
 
 
3.1
 
  
 
3.8 
 
 
 
 
7.4
 
 
Total 
 
 
15.10
 
 
     
 
*World Bank disbursements as of
 
Apri
l
 
2015
.
 
Note: Disbursements may differ from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
Challenge:
 
 
Although
 
the Ministry of Finance (which
,
 
following mid
-
,
 
is in charge of both revenue 
administrat
ion and public expenditure functions) has successfully maintained an adequate level of revenue collection through 
the economic downturn, Armenia’s tax
-
to
-
GDP
 
ratio remains low for its level of income. This is the result of narrow tax 
bases with numerous ta
x exemptions and weak capacity to detect and penalize tax frauds, both of which undermine 
compliance and contribute to widespread tax evasion and informal sector activities.
 
 
The
 
Project Development Objective
 
is to modernize Armenia’s tax administration to
 
(i) increase voluntary tax compliance, 
(ii) reduce tax evasion, (iii) reduce compliance costs, and (iv) increase administrative efficiency. 
 
Results achieved to date:
 
 
The achievement of the project’s development objectives will be assessed through a num
ber of quantitative outcome 
indicators.
 
A f
ew project targets are already met as of end
-
2014
 
outcomes:
 
 

 
US$12.2 million average adjustment results
 
(as of end
-
2013)
 
from audits against the project baseline of US$10.1
 
million (end
-
of
-
project target of 
US$12.
1 million)
;
 

 
95.5
 
percent
 
ratio of collected revenue to tax administration’s operational cost 
(as of end
-
2013) 
against the project 
baseline of 74
 
percent
 
(end
-
of
-
project target of 83
 
percent
)
;
 

 
22 
tax inspectorates against the baseline number of 39 (end
-
of
-
p
roject target of 29);
 

 
321 
hours to prepare and pay taxes against the baseline 500 (end
-
of
-
project target 
of 
400 hours);
 

 
The percentage of total tax returns filed electronically grew from 
a 
baseline 
of 
20
 
percent
 
to 
69.6 percent,
 
exceeding 
the end
-
of
-
projec
t 
target of 60
 
percent
.
 
Key partners: 
T
hrough the project’s design, the Bank team has ensured that 
implementation arrangements are designed to 
ensure cross
-
departmental coordination within the Ministry of Finance. 
 
 
Key development partners
 
include 
the re
presentatives from 
USAID, IFC, 
and the 
IMF
)
. The 
project will work in tandem with the 
USAID 
Tax Reform project, where 
USAID 
will provide extensive complementary 
technical assistance.
 
20
 
 
 
 
 
ARMENIA: SECOND PUBL
IC SECTOR MODERNIZAT
ION PROJECT 
 
Key Da
tes:
 
Approved: 
March 16, 2010  
 
 
Effective: 
July 26, 2010
 
Closing: 
January 
31,
 
2017
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
IBRD Loan
 
Government 
of Armenia 
 
9.00
 
2.54
 
6.
5
 
2.
5
 
 
Total
 
11.54
 
 
 
* World Bank disbursements 
as of
 
April
 
2015
.
 
Note: Some of the amounts disbursed amounts may be on client’s bank 
account.
 
 
Challenge:
 
 
The basic challenge has been change management in relation to the introduction of new systems and practices. Civil service 
management became possi
ble only due to strong government ownership, and only after
 
the
 
introduction of work planning 
and performance and information management systems. Another big challenge is the management of conflicts of interest in 
the public sector. Even after 
the 
increase
 
of
 
civil servant salaries 
of
 
about 70
 
percent
, the low level of public salaries remains 
a challenge holding up the efficiency
 
gains from the introduction of
 
performance appraisal and pay systems.
 
 
The
 
Project Development Objective
 
is to enhance the perfor
mance of public sector management for better service 
delivery by: (i) strengthening institutional capacity in policy formulation; (ii) maximizing the efficiency of human capital;
 
and 
(iii) developing information systems for internal work flow and external 
communication.
 
Results achieved to date
:
 
 

 
-
Ranking Officials was established in 
January 2012 as part of a policy dialogue on conflict of interest management 
reform. The Commission is in charge of conflict of interest, incom
e, and 
asset declarations from about 700 of the highest
-
level officials
.
 

 
The e
-
disclosures system launched in 2013 fully automated the online 
submission and publication of income and asset declarations. Yet the proper 
verification of collected information 
requires additional steps for ensuring 
interoperabi
lity with other state databases
.
 

 
An automated Information Retrieval System in the Traffic Police Service was 
launched in April 2012, reducing, among other indicators, the average time 
for registering a veh
icle from one day initially to 
the 
current 
30 minutes
.
 

 
An archiving system for the electronic document management system 
(Mulberry), operational in all ministries, all governors’ offices, and other 
public administration bodies (totaling 50 entities), was l
aunched in 2012.  
 
 
Toward a paperless office
 
 
Key partners: 
The Bank team is working closely with the (i) 
Office of th
e Government of 
Armenia,
 
which is the main 
project counterpart and has been leading the policy efforts on public administration reforms
;  (ii) 
Civil Service Council 
 
(CSC) in charge of civil service reform and administration; (iii) Commission on Ethics of High
-
Ranking Officials; and (iv) 
Ministry of Territorial Administration, 
Ministry of Justice, Ministry of Foreign Affairs, Ministry of 
Energy and Natural 
Resources, and selected service delivery units of the police, where the project will support functional reviews and business 
process reengineering. 
 
 
Key development partners
 
include the EU (including advisory group), United Nations Deve
lopment Program
me
 
(UNDP), and USAID, which support related activities in the areas of
 
electronic government, civil service reform, and 
regulatory guillotine.
 
19
 
 
 
 
ARMENIA: E
-
SS PROJECT
 
Key Dates:
 
Approved: 
November 30, 2010  
 
 
Effective: 
May 18, 2011
 
Closing: 
June 30, 2016
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
IBRD Loan
 
Government 
of 
Armenia
 
24.00
 
6.00
 
11.45
 
12.
55
 
Total
 
30.00
 
 
 
*World Bank disbursements as of 
April
 
2015
.
 
Note: Disbursements may differ from financing due to 
exchange rate fluctuations at the time of disbursement.
 
 
 
Challenge:
 
 
The main challenge in the sector remains
 
the lack of coordination in information and communications technology (ICT) 
development efforts. The main constraints for ICT business development and innovation generation are still the lack of 
adequate infrastructure for business incubation and the low 
access to credit and commercial investments, particularly in 
the regions of Armenia.
 
 
The 
Project Development Objective
 
-
society and enterprise innovation 
in Armenia by strengthening the underlying infrastruc
ture and enabling environment. 
 
Results achieved to date
:
 

 
Citizens and businesses 
have been 
equipped with a tool for identifying and authenticating electronic transactions: 
number of electronic certificates (eIDs) issued reached 175,000 in 2013 from zero 
in baseline year (2009)
;
   
 

 
Increased access to affordable computers: 
the 
share of population using a computer more than tripled during 2009
–
13, owing to inves
tments by the private sector in
 
the Computer for All program. More than 8,000 computers were 
fina
nced under the project in all 11 regions of Armenia
;
 

 
First
-
ever Early Stage Venture Fund 
was 
established in 2013
;
 

 
Gyumri Technology Center (GTC) has been established and is contributing to the region’s enterprise innovation: 
GTC opened in February 2014
;
 

 
En
hanced capacity and growth of the ICT/knowledge
-
intensive sector through 
the 
establishment and support of IT 
labs and innovations centers: three labs were established owing to project support (mLab, Armenia
-
India ICT center, 
and 
C
enter of 
I
nnovative 
S
oluti
ons and 
T
echnologies
).
 
Key partners: 
The World Bank team works 
closely with the 
Ministry of Economy and the
 
Project Implementation 
Units: 
Enterprise Incubator Foundation (EIF), E
-
Governance Infrastructure Project Implementation Unit (EKENG), 
and Foreign F
inanced Projects Management Center (FFPMC), which are responsible for implementation of the project.
 
 
Key development partners
 
include the recently completed USAID
-
(CAPS) project, which supported the IT industry a
consultancy, and other capacity
-
building activities.
 
Other donors currently do not have major specific projects in these 
areas
,
 
but some of their projects have an indirect relation to
 
the aforementioned area, such as cluster development, 
development
 
of micro, small, and medium
-
sized enterprises (MSMEs)
, improvement of the regulatory environment, 
community building, etc. 
 
18
 
 
 
 
ARMENIA: 
SECOND 
COMMUNITY AGRICULTUR
AL RESOURCE MANAGEME
NT 
 
(CARMAC) 
PROJECT
 
Key Dates:
 
Approved: 
June 20
, 201
4
  
 
 
Effective: 
January 23
, 201
5
 
Closing: 
May 31
, 20
20
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbur
sed*
 
Undisbursed
 
IDA Credit
 
IBRD Loan
 
Government of 
Armenia
 
   
9.67
 
 
23.00
                                              
 
 
10.00
 
0.00
 
9.67
 
23.00
 
Total 
 
 
42.67
 
 
 
 
* World Bank disbursements as of 
April
 
2015
.
 
Note: Disbursements may differ from financing d
ue to exchange 
rate fluctuations at the time of disbursement.
 
 
Challenge:
 
The livestock sector in Armenia faces serious challenges, such as unsustainable pasture management and underutilization, 
persistent livestock diseases, processing and marketing con
straints, and reduced productivity. 
This project builds on World 
Bank experience and successes in agriculture, rural development, pasture and livestock management, and participatory 
community development 
promoted under the CARMAC project 
to help Armenia ad
dress these urgent challenges and 
provide investment support. 
 
The 
Project Development Objective
 
is to
 
(i) improve 
the 
productivity and sustainability of pasture and livestock systems 
in targeted communities and (ii) increase the marketed production from s
elected livestock and high
-
value agri
-
food value 
chains
. This would be evidenced by: (i) increased livestock productivity as measured by milk productivity and an increase in 
daily animal weight gain; (ii) 
the 
increased efficiency of communal pasture manage
ment, as measured by increased 
communal budgetary revenues from the lease of pastures; (iii) increased farm sales from livestock; and (iv) increased 
pasture management effectiveness.
 
Key expected results:
 

 
Support for services for farmers involved in lives
tock production 
in another 100 communities in addition to 
the 
89 
included under CARMAC will be
 
improved
.
 
B
etween 201
5 and 2020
, milk productivities for cattle 
will 
increase by 
20
 
percent
. The efficiency of communal pasture management as measured by increas
ed communal budgetary revenues 
from the lease of pastures 
in targeted communities will 
increase by 
150
 
percent, while 
the number of animals sold will 
increase
 
by 
2 
percent for cattle 
and 
20
 
percent
 
for sheep
.
 

 
Efficient and sustainable community
-
managed pas
ture/fodder
-
based livestock production systems 
will be
 
introduced 
in selected mountainous communities through establishing farmers associations and leasing pastures and grasslands. In 
addition to 
89
 
pasture users associations (PUAs) under the 
CARMAC 
projec
t
,
 
100 more
 
are planned under 
CARMAC2
. 
P
asture management plans 
will be
 
develop
ed
 
for all of them,
 
and c
ommunity funds for the 
implementation of these plans 
will be
 
established
.
 

 
T
he ability of agricultural producers and processors to meet domestic demand a
nd access international market 
opportunities in the food value chains of fodder
-
based milk and meat and in processed fruit and vegetables
,
 
where 
Armenia has a competitive advantage
, will improve
.
 

 
T
he capacity of public sector institutions to facilitate bus
iness development and enable market access in the selected 
value chains supported under 
the project will increase.
 
Key partners: 
The Bank works closely with the Ministry of Agriculture
 
and
 
regional governors, as well as village mayors 
and farmer groups
.
 
17
 
 
 
 
 
ARMENIA: COMMUNITY A
GRICULTURAL RESOURCE
 
MANAGEMENT 
 
 
(CARMAC)
 
PROJECT
 
Key Dates:
 
Approved: 
March 22, 2011  
 
 
Effective: 
July 26, 2011
 
Closing: 
September 30, 2016
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbu
rsed*
 
Undisbursed
 
IDA Credit
 
Government of 
Armenia
 
   
16.00
 
   
5.33
 
12.46
 
3.04
 
 
Total 
 
  
21.33
 
 
 
 
* World Bank disbursements as of 
April
 
2015
.
 
Note: Disbursements may differ from financing due to exchange 
rate fluctuations at the time of disbursement.
 
 
Challenge:
 
The livestock sector in Armenia faces serious challenges, such as unsustainable pasture management and underutilization, 
persistent livestock diseases, processing and marketing constraints, and reduced productivity. 
This project builds on Worl
d 
Bank experience and successes in agriculture, rural development, pasture and livestock management, and participatory 
community development to help Armenia address these urgent challenges and provide investment support. 
 
The 
Project Development Objective
 
is to improve the productivity and sustainability of the pasture/livestock livelihood 
systems in selected communities.
 
Results achieved to date
:
 

 
Support for services for farmers involved in livestock production are being improved
.
 
B
etween 2010 and 2014, m
ilk 
productivities for cattle and sheep 
have increased by 11
 
and 6 percent, respectively, from 1,428 to 1,585 kg/year for 
cattle and from 66 to 70 kg/year for sheep. The growth rates of animals for cattle and sheep have increased by 12 and 
3 percent, respe
ctively. The efficiency of communal pasture management as measured by increased communal 
budgetary revenues from the lease of pastures has increased by 55 percent, while sales from livestock have increased by 
48 percent
.
 

 
Efficient and sustainable community
-
managed pasture/fodder
-
based livestock production systems have been 
introduced in selected mountainous communities through establishing farmers associations and leasing pastures and 
grasslands. In addition to 
the 
55 originally planned pasture users associ
ations (PUAs) under the project
,
 
90 
more 
have 
development of 14 others is under
 
way. Community funds for the implementation of these plans are being esta
blished
.
 

 
Community animal health services are being improved through the mobilization of veterinarians with the provision of 
training. 
76 veterinarians participated in the trainings, of which two were women
. Disease control strategies are being 
implemented
. 
Veterinary Service Centers
 
(VSC)
 
in 
the 
Artashav
an community of the Aragatsotn 
marz (
reg
ion)
 
and 
in 
the 
Knd
zoresk community of the Syunik m
arz
 
,
 
and VSCs are equipped and 
have 
started 
functioning, while  
 
 
c
onstruction works of 
VSCs
 
in
 
the 
Chambarak community of the Gegharkunik
 
marz are under 
implementation
.
 

 
Activities for the Technology Assessment Program (TAP) are making good progress
;
 
150 out of 262
 
proposals have 
been presented, 
of
 
which 109 projects 
have been
 
implemented and 40 are
 
under
 
implementation
.
 

 
and 
37 grant 
projects were 
select
ed as winner
s
. 18 projects out of the 
53
 
while
 
35
 
are at different stages of 
im
plementation
. During the 
seven
th round, 
27
 
applications were submitted, 16 projects of which were recognized as 
winners
.
 
 
Key partners: 
The Bank works closely with the Ministry of Agriculture
 
and
 
regional governors, as well as village mayors 
and farmer gr
oups.
 
 
16
 
 
 
 
ARMENIA: GEF ENERGY 
EFFICIENCY PROJECT
 
Key Dates:
 
Approved: 
March 27, 2012
 
Effective: 
August 10, 2012
 
Closing: 
June 30, 2015
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
GEF grant  
Government 
of Armenia
 
  
1.82
 
          
  
   
8.84  
   
 
1.1
 
       
0.
68
 
 
Total  
 
10.66          
 
 
 
*World Bank disbursements as of 
April
 
201
5
.
 
Note: Disbursements may differ from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
Challenge:
 
Armenia has significant potential for energy efficiency and can recoup sizable economic benefits through the utilization of 
this potential. While Armenia is one of the less energy
-
intensive economies 
in the region, largely due to structural changes 
in the economy, large potential remains for further efficiency improvements. A 2008 World Bank study found that 
Armenia could save 132 billion Armenian drams (more than US$360 million) annually, equivalent t
o 4 percent of its GDP, 
through energy
-
efficiency investments. The study estimated that the energy
-
efficiency investments in public facilities would 
have the highest returns, with paybacks of 2
–
10 years. 
The energy
-
efficiency potential has not been realize
d due to several 
informational, knowledge, financing, and legal obstacles.
 
 
Improvements in energy efficiency will contribute to addressing the energy sector challenges. Specifically, higher energy 
efficiency will contribute to: (a) a reduction of investme
nt needs in new generation due to a realization of the energy
-
efficiency potential; (b) an improvement in the country’s energy security due to a reduced demand for gas used for heating 
purposes and as a fuel for electricity generation; and (c) 
the 
better a
ffordability of energy for the poor, given that improved 
energy efficiency will require less energy consumption to achieve the needed comfort level of heating, lighting, or other use
. 
 
 
The 
Project Development Objective
 
is to reduce the energy consumption 
of social and other public facilities. The global 
environmental objective is to decrease greenhouse gas emissions through the removal of barriers to the implementation of 
energy
-
efficiency investments in the public sector.
 
Results achieved to date
:
 
 

 
Imple
mentation of energy
-
efficiency retrofits has been completed at 44 facilities
, which
 
will help reduce 
the
ir
 
energy consumption by 216 million kWh during the economic life of the investments made
;
 

 
The above facilities experienced average energy savings of 40
–
50 percent during winter 2013
–
15
;
 

 
P
rocurement of retrofits at an additional 25 facilities is under way. 
 
 
Key partners: 
The Bank team works closely with the (i) Renewable Resources and Energy Efficiency Fund, a nonprofit 
organization established by the G
overnment with a mandate to promote the development of renewable energy and energy
-
efficiency markets in Armenia and to facilitate investments in these sectors; and 
(ii) Ministry of Energy and Natural 
Resources
, which is responsible for the overall policy 
setting. 
 
 
15
 
 
 
ARMENIA: ELECTRICITY
 
SUPPLY RELIABILITY P
ROJECT
 
Key Dates:
 
Approved: 
May 26, 2011
 
Effective: 
November 28, 2011
 
Closing: 
June 30, 2016
 
Addition
al Financing Closing:  
December 31, 2018
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
IBRD Loan  
 
IBRD Loan
 
Government 
of Armenia
 
   
39.00
 
40.00
 
 
23.00  
   
 
13.8
 
 
 
 
       
25.2
 
40.0
 
Total  
 
102.00          
 
 
 
*World Bank d
isbursements as of 
April
 
201
5
.
 
Note: Disbursements may differ from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
Challenge:
 
 
Armenia’s power transmission infrastructure is old and undermaintained. The average age of transmissi
on assets is 45 
years. Some sections of the 220
-
kilovolt power transmission backbone are in urgent need of rehabilitation. The 
Government’s Energy Sector Strategy and the Sustainable Development Program recognize this challenge, and an 
increase in power su
pply reliability is among the key strategic objectives of the sector. The Government prioritizes the 
replacement of one section of the power transmission backbone, the transmission line connecting two key generation 
centers in the central part of the count
ry (Hrazdan Thermal Power Plant) and in the South (Vorotan Cascade of 
hydropower plants), and service for large electricity consumers in the central
-
eastern part of the country. Replacement of 
the targeted section of the transmission line is critical, sinc
e it is in extreme disrepair and jeopardizes the reliability of the 
power supply and overall network stability. The line was constructed in 1956
–
58 and has been in service since then. 
Conductors, pylons, insulators, and other key pieces of infrastructure a
re obsolete and need replacement. 
There are also a 
number of critical substations
 
that are
 
essential 
to the 
reliability of 
the 
power supply in the country
 
and 
require urgent 
rehabilitation
,
 
particularly 
given that some of the equipment dates back to 
the 
19
30
s
 
and 
ha
s
 
not been replaced since then. 
The Additional Financing will be rehabilitating three of those substations
:
 
Haghtanak, Charentsavan
-
3, and Vanadzor
-
1.
 
 
The 
Project Development Objective
 
is to increase the reliability and capacity of the transmiss
ion network.
 
 
Results achieved to date
:
 
 

 
The transmission line replacement works are in progress
;
 

 
The tender for the procurement of the contractor to rehabilitate the above three substations is expected to be 
announced in April 2015.
 
 
Key partners: 
The B
ank team works closely with the (i) High Voltage Electric Networks of Armenia, the power 
transmission company responsible for the construction, operation, and maintenance of the high
-
voltage power 
transmission network of the country; and 
(ii) Ministry of E
nergy and Natural Resources
, which is responsible for the 
overall policy setting. 
 
 
14
 
 
 
 
 
 
 
ARMENIA: MUNICIPAL W
ATER PROJECT
 
Key dates:
 
Approved: 
February 21, 2012
 
 
Effective: 
June 23, 2012
 
Closing: 
June 30, 2015
 
Fina
ncing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
IBRD Loan
 
Government 
of Armenia
 
Total
 
15.00
 
3.00
 
 
18.00
 
11.82
 
 
 
 
3.18
 
 
 
 
*World Bank disbursements as of 
April
 
201
5
.
 
Note: Disbursements may differ from financing due to exchange rat
e 
fluctuations at the time of disbursement.
 
 
Challenge:
 
 
For many years after the collapse of the Soviet Union, most of the water supply systems in Armenia were in a serious 
state of disrepair. Despite an abundance of water in the country, in most cities
 
and villages
 
it was ava
ilable only a few 
hours per day
 
and at low pressure. Over the past decade, the Government has succeeded in improving access to, and the 
reliability and quality of, drinking water service through the increased use of public
-
private p
artnerships (PPPs), which 
have brought about higher efficiency and improvements in the quality of service to customers. Considerable progress has 
been made in the delivery of water services in small and medium
-
sized towns in Armenia. Despite such improveme
nts, 
however, the sector is still facing some challenges.
 
 
The 
Project Development Objective
 
is to support improvements in the quality and availability of the water supply in 
selected service areas of the Armenian Water and Sewerage Company (AWSC).
 
 
R
esul
ts
 
achieved to date
:
 
 

 
The weighted average daily supply of drinking water ser
vice 
in selected areas increased
 
from 12.30 to 16.
60
 
hours daily 
(the end
-
project target is 16.60 hours daily);
 

 
The weighted average nonrevenue water in selected areas 
decrease
d
 
f
rom 83.50 to 
82.30
 
percent (the end
-
project 
target is 70 percent);
 

 
The ratio of billing and collection increase
d
 
from 93.50 to 
95 
percent (the end
-
project target is 98 percent);
 

 
A
nnual electricity consumption 
decreased 
from 0.23 to 0.1
5
 
kilowatts per cubic
 
meter;
 

 
T
he amount of water production 
decreased 
from 752 to 489 
liters/per capita/per day.
 
IDA
 
Core Indicators:
 
 

 
The number of piped household water 
connections benefiting from the rehabilitation 
work undertaken by the project is 33,
819
; 
 

 
The number of
 
pe
ople in rural areas provided with 
access to improved water sources under the 
project is 21,
400
 
(the end
-
project target is 33,328)
, 
of which 13,830 are women
;
 

 
The number of people in urban areas provided 
with access to improved water sources under the 
proje
ct is 
92
,
530
 
(the end
-
project target is 99,263)
, 
of which 50,457 are women
. 
 
 
Key partners: 
The Bank team works closely with the (i) State Committee on Water Economy (SCWE) and the Ministry 
of 
Territorial Admin
istration; SCWE reports to the m
inistry and i
s responsible for the overall policy setting in the water 
and irrigation sectors; and (ii) Armenia Water and Sewerage Company, a water utility outside the Yerevan service area, 
which covers about 45 percent of the country’s population and is the implemente
r of the municipal water project. 
 
 
Key development partners
 
includ
e ADB, KfW
, the U.S. Agency for International Development (USAID), and EBRD. 
The Bank coordinates with ADB on water sector reforms, particularly on the exchange of information on mutual eff
orts 
in the AWSC service area. EBRD invests in five treatment plants in the Sevan region. KfW is financing water supply 
investments in the cities of Armavir, Vanadzor, and Gyumri. The Bank works closely with many donors to coordinate 
investments in the wat
er and wastewater sector, and these efforts bode well for the significant future improvement of the 
sector.
 
13
 
 
 
ARMENIA: LIFELINE RO
NT PROJECT
 
Key dates:
 
Approved: 
January 31, 2013
 
 
Effective: 
July 15, 2013
 
Closing: 
June 30, 2017
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
IBRD Loan
 
Government 
of Armenia
 
Total
 
45.00
 
11.25
 
 
56.25
 
17.8
 
 
 
 
27.2
 
 
 
 
*World Bank disb
ursements as of 
April
 
201
5
.
 
Note: Disbursements may differ from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
Challenge:
 
 
Since the launch of the Lifeline Road Improvement Project (LRIP) in 2009, there have been noticeable imp
rovements in 
both local employment and journey time. Despite the extensive rehabilitation and visible improvement, about 50 percent 
of Armenia’s Lifeline Road Network (LRN) remains in poor condition
,
 
and there is still an important investment shortage. 
The
 
degraded part of the LRN causes high transport costs and journey times for road users, restricting connectivity to key 
markets such as agriculture and to important services such as health and education, as well as negatively affecting the 
country’s compet
itiveness. This has occurred due to a historic pattern of underinvestment and deferred maintenance, 
resulting in a considerable maintenance backlog. Deferred maintenance leads to a future burden of more expensive 
rehabilitation and road reconstruction, whi
ch increases overall transport costs in the long run.
 
 
The 
Project Development Objective
 
is to improve the access of rural communities to markets and services through the 
upgrading of selected lifeline roads, and to strengthen the capacity of the Ministry 
of Transport and Communications to 
manage the 
LRN
.
 
R
esults
 
achieved to date
:
 

 
Average speed on lifeline roads in project areas improve
d
 
from 20 to 
31.6 
 
(target: 40)
;
 

 
Development and use of Risk Assessment and Management 
System (RAMS) wi
thin Ministry of Transport and 
Communications to support decision making on LRN
 
is in 
progress
;
 

 
Number of “Safe illage” projects completed 
is 13 (target: 
4
)
;
 

 
The 
span of rural roads rehabilitated 
increased 
from 0 to 7
3
 
 
(target: 170)
.
 
IDA
 
Core I
ndicators: 
 

 
The 
share of 
the 
rural population with access to an 
all
-
season road
 
increased
 
from 51 to 57.4 percent 
(target: 60)
;
 

 
The
 
number of rural people wit
h access to an all
-
season road increased 
from 600,000 to 
675,285 
people
 
(target: 
710,000)
, of whic
h 364,654 are 
women
;
 

 
The
 
proportion of roads in good and fair condition 
as a share of total classified roads 
increased 
from 50 
to 
52.8 
percent
 
(target: 54.2)
.
 
Key partners: 
The Bank team works closely with the (i) 
Ministry of Transport and Communication
 
(
MOTC), which is 
responsible for the overall policy setting and 
for overall implementation of the project
; (ii) 
Transport Project 
Implementation Unit State Institution
 
(Transport PIU), charged with coordination and management of implementation 
activities on
 
a day
-
to
-
day basis; and (iii) 
Armenian Roads Directorate State Non
-
Commercial Organization
 
(ARD), which is 
responsible for the technical aspects of project implementation
. 
 
 
Key development partners
 
include 
the Asian Development Bank (
ADB
)
, which is imple
menting a similar project and 
with which the Bank team coordinate
s
 
closely on policy issues. 
The Bank also works closely with many other donors, 
including the European Investment Bank (EIB), EDB, and European Bank for Reconstruction and Development (EBRD),
 
to coordinate investments in the water and wastewater sector, and these efforts bode well for future reforms in the sector. 
 
12
 
 
 
 
 
 
 
 
 
 
 
 
 
ARMENIA: IRRIGATION 
SYSTEM ENHANCEMENT P
RO
JECT 
 
Key Dates:
 
Approved: 
May 22, 2013
 
Effective: 
July 15, 2013
 
Closing: 
June 30, 2017
 
Financing in million US Dollars:
 
Financier
 
Financing
 
Disbursed*
 
Undisbursed
 
IBRD loan
 
Government of 
Armenia
 
   
30.00
 
   
7.5
 
     
10.07
 
     
19.93
 
 
 
 
Total 
 
 
   
37.5
 
 
 
*World Bank disbursements as of 
April
 
2015
.
 
Note: Disbursements may differ from financing due to exchange rate 
fluctuations at the time of disbursement.
 
 
Challenge:
 
The irrigation System Enhancement Project (ISEP) is designed to address some of the ir
rigation and drainage (I&D) sector 
challenges with the aim of contributing to the country’s ultimate goal of ensuring efficient, cost
-
effective, and sustainable 
irrigation. ISEP will consolidate the results achieved to date through past operations and deve
lop synergies with ongoing 
and planned outcomes.  
 
The 
Project Development Objectives 
are
 
(i) to reduce the amount of energy used and to improve irrigation conveyance 
efficiency in targeted irrigation schemes; and (ii) to improve the availability and relia
bility of important sector data and 
information for decision makers and other stakeholders.  
 
Results achieved to date
:
 

 
Energy savings of slightly more than 38 million kilowatt hours (kw/h), equivalent to about 30
 
percent of the total 
needs of the irrigat
ion system in Armenia;
 
 

 
Improvement in the conveyance efficiency of the outlet canals of selected schemes by reducing water losses from 
1.91 liters per second per 100 meters (liters/s/100m) to 0.71 liters/s/100m;
 

 
Crucial information for irrigation water ma
nagement made available, including: (i) an updated estimate of the  
operations and maintenance (O&M) needs of the I&D system; (ii) an updated estimate of the extraordinary 
maintenance (EM) needs of the I&D system; (iii)  information on the amount of water 
made available to the 
system and to its operators
—
water supply agencies (WSAs) and  water users associations (WUAs); and (iv) an 
analysis of the effectiveness of irrigation institutions (WSAs and WUAs) in the performance of their duties.
 
Key partners: 
The
 
Bank works closely with the Ministry of 
Agriculture
 
and
 
State Committee of Water 
Systems
 
(SCW
S
), as 
well as the Ministry of Finance. 
 
 
Key development partners: 
The Bank team closely cooperates with the Eurasian Development Bank (EDB), which 
the 
Bank assi
st
s
 
in
 
preparing a project in the sector in order to ensure that the principles underlying the project design are 
confirmed (cofinancing request to WUAs for tertiary rehabilitation, respect for environmental and social considerations for 
any pump
-
to
-
gravit
y interventions, etc.). Other partners involved in the sector are
 
the
 
German Development Bank (KfW), 
the French Development Agency (AFD), and the Japanese International Cooperation Agency (JICA).
 
11
 
 
IFC funding, along with advisor
y support 
from the 
Armenia Sustainable Energy Finance 
Project
, 
is being provided to Byblos Bank 
Armenia
 
to increase access to housing finance 
and support Armenia’s first residential energy
-
efficiency lending packages offered by a local 
bank.
 
So far, the ba
nk has financed 
59
 
projects
 
with
 
expected energy saving
s
 
of 
801
 
MWh/y
 
and 
an expected annual
 
GHG 
emission 
reduction of 
401
 
tCO2e
.
 
 
A
dvisory support from IFC
 
also h
elps partner 
banks design renewable energy and energy
-
efficiency financing products
, 
encourag
ing
 
them 
to adopt international environmental and social 
standards and contribute to decreasing GHG 
emissions.
  
 
 
Agriculture
 
IFC has supported
 
agribusiness in Armenia in 
a wide range of interventions
. 
A US$2.5 million 
loan to 
Euroterm, a leading producer 
of Noyan 
fruit juices and preserves in Armenia, benefits the 
rural community by creating jobs, boosting 
agriculture, and increasing exports. 
IFC has also 
provided advisory services to Euroterm, helping 
implement a food safety management system 
based on int
ernational standards. 
The IFC 
Armenia 
P
roject
 
has helped increase 
and 
facilitated access to market for local food 
producers by helping them implement food safety 
management systems and 
build the capacity of 
local consultants. Loans to 
Armenia’s ACBA
-
Credit Agricole Bank (
US$50 million in total) 
expand lending to local MSMEs and 
agribusinesses, boosting job creation and 
economic growth.
 
 
 
 
 
 
 
10
 
 
between 2009 and 2013
. Under the project, the 
first regional technology and innovation center 
was opened in 
Gyumri 
in September 2014.
 
 
Education
 
Bank support includes two in
vestment 
projects
.
 
The second 
Education Quality and 
Relevance Project
 
(EQRP) (US$25 million) 
aims at 
enhanc
ing
 
school learning in general education 
and improv
ing
 
the school readiness of children 
entering primary education
. 
The
 
Education 
Improvement Project
 
(EIP) (US$30 million) targets 
investments in preschool, general school, upper 
secondary
,
 
and higher education. 
 
 
Health
 
The Bank has supported the health sector 
through two 
Health System Modernization 
Projects
 
amounting to US$60 million
, which
 
focus on 
pr
ovid
ing
 
more accessible, high
-
quality, 
and sustainable health care services to the 
population. 
The
 
new
 
Disease Prevention and Control 
Project 
will
 
improve
 
MCH services and the 
prevention, early detection, and management of 
selected NCDs at the PHC level
.
 
 
 
The IFC Program and Strategy 
 
 
Armenia became an IFC member in 1995. 
Since then
, 
IFC has invested more than 
US
$320 
million in 52 projects
 
across a range of sectors, 
including financial markets, manufacturing, and 
mining, and mobilized nearly 
US
$23 million
 
from 
other lenders. IFC Advisory Services provide 
advice through projects focusing on the financial 
sector, sustainable energy, regulatory 
simplification, and food safety
. 
 
 
Financial Sector
 
IFC’s strategy in Armenia is part of 
the 
joint 
World Bank Group 
CPS
. IFC’s priorities include 
supporting the development of 
M
SMEs to create 
employment opportunities, promoting energy 
companies and mitigate climate change, and 
helping banks improve risk management to r
educe 
their vulnerability to economic downturns.
 
 
IFC loans to financial institutions
 
are 
strengthen
ing
 
lending to MSMEs, including those 
in rural areas
, and 
helping 
several banks 
engage in 
international interest rate and currency swap 
transactions to redu
ce risks.
 
Under the 
Global 
Trade Finance Program
 
(GTFP), IFC
 
helped
 
banks
 
finance the foreign trade transactions of Armenian 
companies, thus boosting trade. IFC 
has 
provid
ed
 
two 
loan
s
 
of US$4 million 
and US$3 million 
in 
local currency, which will be lent t
o MSMEs and 
entrepreneurs
 
nationwide
. 
 
 
IFC, together with other international 
financial institutions
, has invested in the first 
professionally structured and managed private 
equity fund in the South Caucasus
 
region
, 
Small 
Enterprise Assistance Funds
 
(SEAF
) Caucasus, to 
provide debt and equity capital to 
M
SMEs.
 
In 
December 2013, IFC issued a 
AMD 
2 billion 
(approximately US$5 million) bond 
to strengthen 
Armenia’s capital markets and boost lending to 
the private sector. The bond is IFC’s first dram 
issuance
; 
i
t is also the first placement by a 
nonresident issuer and the first foreign corporate 
bond issued in Armenia’s capital markets. 
 
 
Energy
 
IFC has provided a US$15 million loan to 
Ameriabank, along with advisory support 
from
 
the
 
Armenia Sustainable Energy F
inance 
Project
,
 
for lending to small hydropower projects, 
supporting Armenia’s renewable energy sector, 
and helping lower greenhouse gas 
(GHG) 
emissions. Projects supported by the loan are 
expected to reduce carbon dioxide emissions and 
help increase Armen
ia’s domestic electricity 
production.
 
As of 
fall 2014,
 
the bank ha
d
 
financed 
12 
small hydropower plants (
SHPPs
)
 
with 
installed 
capacity of 
40.1 MW
, annual
 
generation 
of 
124.9 
gigawatt hours (
GWh
),
 
and expected 
annual 
GHG 
emission 
reduction
s
 
of 
49,964 t
ons 
of 
CO
2
 
e
quivalent (tCO2e)
.
 
 
With the support of the Government of 
Canada, IFC has partnered with HSBC Bank 
Armenia to expand the financing of renewable 
energy and energy
-
efficiency projects
, 
promoting the efficient use of resources and 
reducing 
GHG
 
emissio
ns. It has provided HSBC 
Bank Armenia with a US$30 million 
loan,
 
including US$8 million from the IFC
-
Canada 
Climate Change Program, and advisory support 
from the 
Armenia Sustainable Energy Finance Project
.
 
The advisory 
services 
from IFC support
 
energy
-
effi
cient and renewable energy projects for 
M
SMEs in Armenia.
 
So far, the bank has financed 
nine
 
projects
 
with
 
expected energy saving
s
 
of 
34,991 MWh
 
per year (MWh/y) and an expected 
annual 
GHG 
emission 
reduction of 
6,614 tCO2e
.
 
 
9
 
 
Climate Reform Project.
 
This will support the 
Governm
ent in designing its investment policy 
and improving the legal framework for FDI 
attraction, 
along with
 
advancing business 
inspection reforms.
 
 
Energy
 
The World Bank promotes electricity supply 
reliability
 
through a 
US$
7
9 million loan to 
rehabilitate 
an im
portant segment of the 
transmission network. The Bank is also 
supporting improvements in the energy efficiency 
of social and other public facilities (e.g., sc
hools, 
kindergartens, hospitals
) through a US$1.82 
million GEF grant. The grant, 
coupled with 
US$8
.8 million in g
overnment cofinancing, 
support
s
 
energy
-
efficiency investments in social 
and other public facilities. 
 
 
Under
 
the 
Scaling
-
Up 
of 
Renewable Energy 
Program
 
(SREP) and 
with 
World Bank 
support, 
the Government prepared an 
Investment Plan
 
that
 
ident
ifies priority 
renewable energy technologies and projects.
 
Under t
he SREP Investment Plan
, 
Armenia will 
receive
 
US$40 million in concessional financing.
 
The 
Geothermal Exploratory Drilling Project
 
at 
the 
Karkar site (
a 
US$8.55 million SREP grant 
administer
ed by the World Bank) 
will help 
to 
confirm (through exploratory drilling) 
whether the 
geothermal resource at 
the
 
site is suitable for 
power generation 
and, if confirmed, to involve the 
private sector in 
the 
development of a geothermal 
power plant.
 
Implemen
tation is expected to 
commence in June 2015. 
Preparation of the 
Utility
-
Scale Solar PV project
 
is also under
 
way 
to 
add around 25
–
30 
megawatts (
MW
)
 
of solar 
energy
–
based generation capacity. 
 
 
Roads
 
The World Bank 
supports the Government’s 
effort to improv
e 
communities 
through the 
Lifeline Roads 
Improvement Project
 
(LRIP) and two 
additional investments
, as well as the
 
newer
 
Lifeline Road Network Improvement Project
 
(LRNIP), 
with total financing of US$146.6 million. The 
objective o
f this reform program is to continue
 
to
 
the rehabilitation of lifeline roads and strengthen 
the management capacity of the lifeline network,
 
and thereby improve the access of rural 
communities to markets and services. 
 
The Bank also provides technical assi
stance 
to strengthen the in
-
house technical capacity 
of the Armenian Roads Directorate
, upgrade 
road construction standards, improve road safety, 
enhance the sustainability of road financing and 
management, and adopt new road design and 
maintenance technol
ogies and approaches.  
 
 
Agriculture
 
The ongoing
 
IDA
-
funded
 
Community Agriculture 
Project
 
and a f
ollow
-
up CARMAC
-
2 project
 
are key 
instruments for addressing 
farmers’ 
 
through 
addressing produ
ctivity 
and supply constraints.
 
 
Water
 
The Bank has supported Armenia’s efforts to 
provide a safe and constant water supply
 
and 
reduce environmental pollution through water 
management projects (US$50 million for Yerevan 
and US$58
 
million
 
for the areas outs
ide Yerevan). 
Over 332,000 households in Yerevan and 264,000 
households in the regions have benefited from 
improvements in the duration of water supply and 
water quality. 
 
 
The
 
Government opted to partner with 
the 
private sector 
to introduce 
significant re
forms.
 
With the Bank’s support, the Government 
introduced a performance
-
based management 
contract for Yerevan. Building on its success, the 
authorities 
decided on
 
a lease contract for 10 
years, supported by 
a
 
second project. A 
public
-
private partnership (
P
PP
)
 
model was subsequently 
replicated for urban areas outside Yerevan, 
covering about 45 percent of the population. 
 
 
Irrigation and Drainage
 
While much has been achieved, the need for 
irrigation rehabilitation investments in 
Armenia remains high.
 
The ongo
ing 
Irrigation 
System Enhancement Project
 
help
s
 
improve the 
availability and reliability of important sector data 
and information for decision makers
 
and 
continue
s
 
the institutional reforms 
with a 
focus on 
water management, including the wider use of 
moder
n irrigation techniques and a more efficient 
use of water. 
 
 
ICT and Innovation
 
The World Bank is supporting the 
development of the
 
ICT sector under the 
E
-
Project
. 
The 
p
roject
 
has contributed to an 
increase in the
 
share of the population 
with access 
to
 
a computer
, 
a share that 
more than tripled 
8
 
 
the 
gap between the formal qualifications of 
graduates and the skills employers actually require. 
Employers are increasingly pointing out that those 
graduating from post
-
secondary education 
institutions 
often 
lack the skills
 
to
 
meet their 
needs and
 
to succeed in today’s labor market.
 
 
 
Health 
 
 
Since the late 1990s, Armenia has made 
significant achievements in redesigning its 
health system. 
Key
 
reforms have included: (a) 
strengthening primary health care (PHC) 
provision; (b) dow
nsizing excess hospital capacity; 
(c) changing provider payment mechanisms and 
introducing a purchaser
-
provider split; and (d) 
targeting the poor in providing free
-
of
-
charge 
health care services.
 
 
Many
 
health indicators are improving, but 
challenges remain
. 
Since 1995, t
he average life 
expectancy in Armenia 
has 
increased.
 
Infant, 
c
hild
,
 
and 
n
eonatal mortality continue to decline, 
approaching targets set in the 
country’s
 
maternal 
and child health
 
(
MCH
)
 
strategy. 
Nevertheless, 
Armenia’s health care system is 
still struggling to 
effectively respond to the epidemiological changes 
in morbidity and mortality patterns in recent years
.
 
The greatest burden of disease now comes from 
noncommunicable diseases (NCDs)
; 
roughly 80
 
percent of all deaths are due to
 
a combina
tion of
 
circulatory system diseases, malignancies, 
respiratory system diseases
,
 
and diabetes mellitus. 
 
 
 
 
A major challenge in addressing the current 
NCD burden is the relatively low government 
The health budget for 2014 was 
increased by 14
 
percent, and the number of poor 
covered by a free health benefits package 
went up 
by 
46 percent. 
Despite 
this, a
t a level of 1.51 
percent of GDP in 2013, Armenia has one of the 
lowest state allocations to health in the region. 
The share of public sector e
xpenditures comprises 
only 36.8
 
p
ercent
 
of total health expenditures
, and 
t
he level of out
-
of
-
pocket payments remains high
.
 
 
 
 
Utilization of health services, both PHC and 
hospital, has increased
. 
PHC
 
per capita visits 
per year 
have 
doubled since 2001, inc
reasing from 
1.8 to 4.0 in 2014. 
A f
urther in
crease is expected 
in the next three
 
years following 
the
 
full
-
scale 
implementation of active screening programs on 
NCD early detection and management. 
Between 
2010 and 2013,
 
hospitalization rates significan
tly 
i
ncreased in 
the 
different region
s
.
 
 
 
THE WORLD BANK
 
GROUP
 
ROGRAM 
IN ARMENIA
 
 
World Bank Program
 
 
The 
Country Partnership Strategy (
CPS
)
 
for 
FY14
–
17 supports accelerating growth, 
reducing poverty
,
 
and boosting shared 
prosperity
. 
This is to be accomplished b
y
 
providing policy advice and investments in three 
and job creation; (ii) improving 
the 
efficiency and 
targeting of social services; and (iii) improving 
governance and anti
-
corruption measures.   
 
 
The Wor
ld Bank’s portfolio in Armenia 
performs satisfactorily and consists of 
18
 
operations with a total commitment of 
US$5
92.7
 
million. 
It includes US$200 million in 
International Development Association (IDA) 
credit and US$3
9
1 million in International Bank 
for 
Reconstruction and Development (IBRD) 
loans
,
 
along with a Global Environment 
Facility 
(GEF) project amounting 
to 
US$1.8 million. 
An 
active program of 
42 
t
rust 
f
und operations 
totaling US$18
 
million 
is cofinancing ongoing 
projects
 
that
 
support institutional
 
capacity 
building 
and 
activities in key reform areas
.
 
 
Financial Sector 
 
The 
World 
Bank
 
continues its support to 
financial sector development through a 
number of policy reforms supported by the 
t
hird Development Policy Operation
 
(DPO
-
3)
, 
specifically in t
he area of consolidated supervision 
and secured transaction reform, information 
disclosure, insolvency
,
 
and NPL foreclosure. In 
addition, the Bank provides technical assistance to 
the Ministry of Finance 
to 
enhanc
e
 
its capacity in 
financial sector regulati
on, pension reform 
oversight
,
 
and financial sector policy formulation. 
 
 
Private Sector Development
 
The World Bank is supporting the 
diversification of exports and tradable 
industries.
 
Specifically, the 
Trade Promotion and 
Quality Infrastructure Project
 
wi
ll strengthen
 
the 
Government’s capacity to provide export 
promotion, investment attraction, and quality 
infrastructure services to firms. The project laid 
the groundwork for IFC’s new 
Armenia Investment 
7
 
 
Among the employed, nearly 60 percent were 
engaged in paid work, 30 percent in own
-
account 
work, and 14 percent in unpaid family work. 
Se
rvices followed by agriculture accounted for the 
largest share of employment. Only 20 percent 
were employed in the public sector. Nearly half 
of 
the unemployed were in Yerevan. About 50 
percent of the jobs were informal, mainly in 
agriculture
, and a
bout 26
 
percent of the employed 
and 40 percent of the unemployed were poor. 
 
 
The s
hare of 
the 
working
-
age employed is 
low
.
 
Over time, employment growth has not kept 
pace with the increase in the working
-
age 
population or economic growth.
 
The 
employment
-
to
-
popula
tion ratio is low
,
 
largely 
because of 
the
 
low employment
-
to
-
population 
ratio 
of women
. The GDP contraction in 2009 
was accompanied by a fall in men’s employment
-
to
-
population ratio from 60.6 percent in 2008 to 
56.7 percent in 2009; women’s employment share
 
remained unchanged. 
 
 
2008
 
and 20
12, poverty rates were 
substantially lower than what would have 
occurred in the absence of certain public 
policy measures. 
Government efforts to 
maintain public spending on social protection 
cushioned and helped al
leviate poverty during this 
severe downturn. Poverty would have been much 
higher in the absence of these transfers
 
before and 
during the crisis.
 
In 2013, poverty incidence would 
have been 
46
 
percent in the absence of 
social 
protection
, as opposed to the ac
tual rate of 3
2
.0 
percent
.
 
P
ensions represent the largest social 
transfers, reaching 53 pe
rcent of households, 
and 
thus have the greatest impact on poverty 
alleviation 
among
 
the whole population.
 
 
The
 
family benefits program (FBP) is 
Armenia’s flagship non
contributory social 
assistance program
, covering 12 percent of the 
population, and the most pro
-
poor transfer in 
Armenia
.
 
The FBP is means tested and accords 
priority to the poor and other vulnerable social 
groups, such as the elderly, persons with 
disabil
ities, and 
orphans
. Although 
still fairly 
well 
targeted to the 
bottom 40 percent
, 
the
 
precision 
has fallen over the p
ast two years, in part because 
of the categorical component of the targeting 
formula that allows coverage to socially vulnerable 
but non
-
po
or households.
 
 
 
The 
Ministry of Labor and Social Issues 
(
MLSI
)
 
is actively pursuing complementary 
policies to cash transfers in order to reduce 
the 
root causes of poverty through the 
provision of 
integrated 
social and employment 
services. 
To this end, the
 
World Bank has been 
supporting the realization of new Integrated Social 
Service Centers and the modernization of 
employment services through Social Protection 
Administration Projects. These centers will allow 
for the administration of benefits and deliver
y of 
services in a single location
,
 
and should with time 
facilitate the provision of well
-
coordinated social 
policies to tackle 
the 
different challenges faced by 
household members, in line with international best 
practices. 
 
 
Education
 
 
Considerable progre
ss has been made to 
improve access to preschool, general 
education, and higher education.
 
Armenia has 
nearly achieved universal enrollment rates at the 
primary (grades 1
–
4) and lower secondary (grades 
5
–
9) levels with little geographical or 
socioeconomic d
i
sparity
. 
I
ndicators compare
 
well 
with the countries 
at
 
similar 
stages of 
economic 
development 
i
n the 
ECA region.
 
In terms of 
financing, Armenia invests 2.6 percent of GDP in 
education overall, of which 0.3 percent is invested
 
in higher education
. B
oth 
of 
these figures 
are low.
 
 
A wide range of reform
s aim
ing
 
at improving 
education 
quality and efficiency have taken 
place in the
 
sector. 
The Government developed 
a
 
National Curriculum Framework
 
with
 
new 
standards and syllabi, extend
ed general education 
from 10
 
to 12 years, and introduced a network of 
high schools that offer specialized streams. 
Furthermore, there has been a concerted effort to 
provide all 1,431 schools in Armenia with 
c
omputers and Internet access
. The Government 
has also introduced a teacher c
ertification system
, 
complemented by
 
the implementation of 
comprehensive professional development po
licies
 
and performance
-
based 
salary differentiations. 
 
 
Improving student
 
performanc
e remains 
a
 
key 
challenge.
 
The results of the Trends in 
International Ma
thematics and Science Study 
(TIMSS) 
indicate
 
that Armenian student 
performance at 4th and 8th grades is not 
improving
 
and that the overall level of 
achievement is low compared to the 
Organi
s
ation 
for Economic Co
-
operation and Development 
(
OECD
)
 
average
. 
Th
ese results corroborate with 
6
 
 
In 2013, 32.0
 
percent of the population lived 
below the national poverty line of 
39,193
 
drams, 
an incidence of poverty that has 
decreased 
only 
marginally since the 
2
009
 
economic crisis
,
 
and 
GDP per capita 
declined
 
by 14.1 percent
 
(
see 
figure 
6
). Between 2008 and 2011
, the
 
p
overty 
headcount increased by 7.4 points
—
from 27.6 
percent to 35.0 percent
—
but 
growth did not 
translate into sustainable poverty reduction
. 
Between
 
2011 and 2013
,
 
the 
poverty rate 
decreased 
only 
3 percent.
 
 
Figure 
6
. Changes
 
in Poverty in t
he Aftermath of 
the Crisis (as percentage
 
of population)
 
 
Source: 
Integrated Living Co
nditions Survey (ILCS) data 
2009
–
2013
.
 
 
The geography of poverty in Armenia 
shows
 
substantial gap
s
 
the capital city 
Yerevan (25.6 percent), rural areas (31.7 
percent)
,
 
and other urban areas (39.4 percent) 
(see figure 
7
). Between 2008 a
nd 2009, poverty in 
Yerevan increased dramatically from 20.1 to 26.7 
percent of the popul
ation and then slowly 
declined to 25.6 percent in 2013. Regional 
disparities
 
are
 
link
ed
 
to structural differences 
related to employment and economic activity 
across regions.
 
 
Fig
ure 
7
. 
The Geography of Poverty in Armenia 
(as percentage
 
of population)
 
 
Sou
rce: 
Integrated Living Co
nditions Survey (ILCS) data 
2009
–
201
3
.
 
 
Consumption inequality is 
relatively 
low in 
Armenia
 
but shows an increasing trend
. 
Although
 
inequality is a concern in itself, it can 
also weaken the transmission of the possible 
effects 
of 
g
rowth on poverty reduction. During 
the time period following the global economic 
crisis, Armenia witnessed a widening gap between 
the relatively rich and the poor in society. 
 
 
Although Armenia has had success in 
reducing poverty, since the 
2009 
crisis the
 
country has not performed as well as other 
low
-
middle
-
income countries in the E
urope 
and 
C
entral 
A
sia (ECA)
 
region 
(
see 
figure 
8
). 
Comparisons over time show that poverty in 
Armenia fell sharply between 2001 and 2008; 
poverty at US$2.50 per person per day
 
fell from 
67 percent in 2001 to 26 percent in 2008. Cross
-
country comparisons show a high level of poverty 
in Armenia, although lower than in neighboring 
Georgia.
2
 
In 2013, 30 percent of the population 
lived on less than US$2.50 per person per day, 
while 
about 80 percent lived on less than US$5.
 
 
The poor and those in the bottom 
40 
percent 
are more likely
 
to
:
 
(i) live in urban areas outside 
the capital; (ii) have larger househ
olds with more 
children; (iii) 
have less education
;
 
(iv) be out of the 
labor forc
e or unemployed
;
 
(v) live in households 
headed by women
;
 
and
 
(vi) 
be
 
more dependent on 
income from agriculture. 
 
 
Figure 
8
.
 
Relative Poverty
 
in Armenia based on 
Consumption Data
 
(as percentage of population)
 
 
Source: 
World Bank
 
Armenia Poverty Assessment 
2015
; 
calculations based on Integrated Living Conditions Survey. 
 
 
The size of the working
-
age (15
–
75
 
years
) 
population was 2.3 million in 2012, or 75 
percent of the population.
3
 
Of these, 63 percent 
were economically active. The economically 
inactive popu
lation 
was made up
 
of students, 
homemakers, and pensioners. Among the 
economically active, 17 percent were unemployed. 
                                        
                  
 
2
 
The differences between the national and ECA
-
harmonized 
poverty rates lie in the differen
t
 
consumption aggregates 
used
,
 
as well as the application of adult equivalence in the 
national measure as compared to per 
capita in the ECA
-
harmonized measure. 
 
3
 
Republic of Armenia, “
Social Snapshot and Poverty in 
Armenia 2013
” (Yerevan: National Statistical Service, 2013)
.
 
5
 
 
them more dependent on livestock and natural 
resources for their livelihoods. At the same time, 
the livestock sector is facing serious challenges, 
such as unsustainable pasture manageme
nt and 
underutilization, persistent livestock diseases, 
processing and marketing constraints, 
and
 
reduced 
productivity. Additionally, there are huge 
fluctuations in the supply of dairy products, with 
most milk produced in the summer months and 
almost no pr
oduction in winter and spring.
 
 
These challenges limit Armenia’s capacity to 
exploit opportunities stemming from 
increasing domestic demand.
 
Imported meat 
now accounts for half of national meat 
consumption, due to low productivity in the 
livestock sector a
nd the unreliable supply of meat 
and milk. The dairy and meat sectors are 
and there is scope for strengthening their 
productivity and supply constraints. 
 
 
ICT Sector and
 
Innovation
 
 
Information 
and communications 
technology 
(I
C
T) has become one of the important 
sectors of the Armenian economy,
 
contributing 
to technological innovation and productivity 
growth in the country. In 201
3
, the turnover of 
the Armenian software an
d services sector 
reached approximately US$24
5
.
7
 
million, resulting 
in a 2
1
.
4
 
percent compound annual growth rate 
(CAGR) during 
200
8
–
20
1
3
. This turnover 
constitutes about 
3.6
 
percent of Armenia’s 
nominal GDP
 
and 9 
percent
 
of expo
rt (
see 
figure 
4
), although
 
the sector employs only 1 percent
 
of 
labor
 
of the country.
 
 
Figure 
4
. Armenian I
C
T Industry Turnover
 
 
 
HUMAN DEVELOPMENT 
 
 
Shared Prosperity, Poverty Reduction, and 
the 
 
 
Since 
the 2009 global economic crisis
, 
Armenia has made limited progre
ss in 
reducing poverty. 
P
atterns of shared prosperity 
between 2010 and 2013 
show 
that growth has 
benefited the top 60
 
percent
 
of the income 
distribution 
more than the bottom 40
 
percent
.
 
Analysis 
of 
the 
drivers of 
poverty reduction and 
profiles of the botto
m 40
 
percent
 
clearly show the 
importance of labor market
s, remittances
,
 
and 
public spending on social protection
.
 
 
 
The 
World 
Bank’s shared prosperity indicator 
measures growth in 
the 
mean consumption of 
the bottom 40 percent of the welfare 
distribution 
(
s
ee 
figure 
5
).
 
This indicator
, 
reflecting
 
the extent to which aggregate growth in 
the economy reaches the less well
-
off in society
, 
shows 
that 
in the early 2000s
,
 
economic growth in 
Armenia
 
benefited the poor and vulnerable in 
the 
country
. However, the glob
al economic crisis of 
2009 
and the sluggish recovery 
diluted 
those
 
gains
.
 
 
 
Prior to the crisis, the bottom 40 
percent 
enjoyed an annual growth in mean 
consumption of 
4.29
 
percent
, exceeding the 
population average of 3.5
0
 
percent per year. 
I
n 
2009
, t
he bot
tom 40 
percent 
were hit hard by the 
contraction of the economy
, 
facing a reduction in 
consumption of 7.
46
 
percent per year
,
 
a 
contraction larger than that experienced by the 
economy a
s a whole. Especially between 2012 and 
2013, the annual growth rates in m
ean 
consumption suggest that the bottom 40 percent 
of the welfare distribution 
was
 
not able to grow at 
a speed 
similar to
 
the rest of the population. 
 
 
Figure 
5
.
 
Patterns of 
S
hared 
Prosperity
: 
Percentage
 
Growth
 
of 
Mean
 
Consumption
 
 
Source: 
World Bank Arme
nia Poverty Assessment 201
5,
 
b
ased 
on data from 
the 
Integrated Living Conditions Survey.
 
 
 
0
50
100
150
200
250
300
2006
2008
2010
2011
2012
2013
mln.  USD
Exports
4
 
 
Roads
 
 
As 
a landlocked country with limited transport 
routes
, t
A
rmenia’s
 
sustainable economic 
development
.
 
The road transport network has a 
significant impact on the country’s economic 
the s
uccess of the export
-
oriented
 
economy.
 
 
The total length of Armenia
’
s road networ
k is 
7,704 
, excluding urban roads, less 
than half 
of which is
 
in good or fair condition.
 
The Government has prioritized the rehabilitation 
and reconstruction of roads, as reflected in the 
Transport Sector Strategy and the Armenia 
Development Str
ategy.
 
 
 
rural communities has been one of the 
Government’s key objectives.
 
These roads are 
called “lifeline” roads and 
they 
cover about 40 
percent of Armenia’s 
rural
 
roads. As part of its 
anti
-
crisis policy aimed at
 
creating temporary 
employment through investment in public works, 
the Government 
has 
embarked on a program to 
make significant investments in the improvement 
of the “lifeline” road network.
 
 
Lifeline Roads 
reconnect isolated rural 
communities to their urb
an centers.
 
 
 
 
Water
 
 
Over the past decade, the Government has 
strived to improve access to, and the reliability 
and quality of, drinking water and its 
infrastructure
. However, there are 
still 
several 
sector
-
related challenges that need to be addressed 
to
 
further improve the water sector in the medium 
to long term. Non
r
evenue 
w
ater (NRW) remains 
high, 
but
 
the costs entailed in reducing 
it
 
are also 
very high
—
given the 
needed infrastructure 
investments
—
making the returns on such an 
investment low.  
 
 
Water a
nd sanitation tariff adjustment and 
cost recovery are an important sector reform 
element
 
that is being supported by the 
Development Policy Operation Series (DPO, 
2013
–
15). 
The reform is expected to result in 
adequate tariff level
s
,
 
allowing
 
for 
the fulfill
ment 
of
 
services in the long term with a robust method 
of dealing with future change
 
to
 
ensur
e
 
the 
water 
sector’s long
-
term sustainability.
 
 
Irrigation and Drainage
 
 
The Government is working to recover 
irrigated areas and consequently to increase 
rural in
comes
 
by rehabilitating the country’s 
irrigation and drainage infrastructure.
 
More than 
80 percent of agricultural GDP is generated from 
irrigated lands. Thus, the deterioration of the 
irrigation infrastructure threatens rural 
employment and rural incomes.
 
 
Agriculture
 
 
A
griculture constitutes 19.2 percent of GDP
 
and 
contributes
 
substantially
 
to employment 
and rural incomes
, as 40 percent of total 
employment is involved in 
the sector
. 
 
 
L
arge disparities 
remain 
in the rural poverty 
levels between Armenia’s 
regions
.
 
In the 
mountain communities, rural poverty incidence 
grows with altitude: 34.7
 
percent
 
above 1,700 
meters, as opposed to 27.1
 
percent
 
below 1,300 
meters or 29.5 
percent
 
in the 1,300
–
1,700 meter 
range. 
A
ccess to sufficient land resources is 
also 
cr
itical. Poverty affects 40.6
 
percent
 
of landless 
rural 
residents
, 32.4
 
percent
 
of those with access 
of
 
up to 0.2 
hectares
 
of land, and around 30
 
percent
 
or less of those who own more than 0.2 
hectares.
 
 
 
Some 335,000 farms operate in the sector
, with 
an 
av
erage landholding of aro
und 1.4 hectares per 
household. This
 
is rather small for efficient 
agriculture 
and a diversified production system, 
involving both crops and livestock. The agro
-
processing subsector is the main employer in rural 
areas.
 
 
The economic
 
downturn increased the 
vulnerability of small
-
scale operators
, making 
3
 
 
concentration is not high
,
 
and f
urther 
consolidation of the banking sector is expected 
during 2015
–
16 in response to the CBA
’s
 
capital 
increase requirement. 
Non
-
bank financial 
institutions (NBFIs) account for only 7 percent
 
of 
financial sector assets. 
 
 
Private Sector Development
 
 
The Wo
rld Bank is a strong advocate of 
micro, small, and medium
-
size
d
 
enterprise 
(
M
SME
)
 
growth
.
 
The Bank’s support is aimed at 
(i) 
establishing a clearer legal framework to 
strengthen government capacity to deliver services
 
and
 
(ii) 
reducing regulatory barriers 
to improve the 
business environment and investment climate, 
thereby 
encourag
ing
 
new business entries and 
improv
ing
 
access to finance.
 
 
Armenia has undergone extensive business 
environment reforms over the past years
 
and 
has achieved a remarkable turnaround
 
in its 
investment climate. In 2014
–
15
, Armenia 
improved its rank
ing
 
by four
 
to 45th position out 
of 189 economies in the 
Doing Business
 
ranking, 
and the World Economic Forum’s Global 
place in 2010
–
11 (out of 139)
 
to 85th in 2014
–
15 
(out of 144). However, this has not yet translated 
into substantial increases in FDI or business 
activity. Fostering entrepreneurship and 
stimulating the growth of 
M
SMEs continue to be 
among the major development challenges. 
 
 
Mining
 
 
S
ince 2007, 
the International Finance 
Corporation (
IFC
)
 
has been investing equity 
in Lydian International to finance the Amulsar 
gold min
e
 
project. 
Mining is Armenia’s main 
export
-
generating sector.
 
IFC’s investment has 
enabled Lydian to prepare the Amulsar
 
mining 
project, 
with 
a 
potential to attract additional 
mining exploration and investment to the country.
 
T
he World Bank is
 
also
 
engaged in the mining 
sector through budget support operations and 
technical ass
istance
, with support to 
the 
new 
Mining Code
 
as
 
well as 
measures to 
incentivize
 
responsible mining to better align 
the 
industry 
with good environmental practices. 
 
 
Public Sector/Governance
 
 
Since 2011, the state budget has been 
designed using a program
-
format.
 
Th
is 
informal exercise 
ha
s 
sought 
to 
strengthen the linkages between policy objectives 
and budgets, 
although
 
the formal budget 
continues to be prepared based on economic 
classification. Since fall
 
2013
, based on the revised 
Law on 
the 
Budgetary System, the presentation of 
program 
budgets to 
the 
National Assembly 
has 
been
 
mandatory.
 
A
 
Public Expenditure and 
Financial Accountability (PEFA) assessment in 
2013 p
rovided an overview of the post
-
crisis 
public financial management (
PFM
)
 
system, 
observing improvements in 11 out of 31 PEFA 
i
ndicators. 
 
 
E
-
government is an overarching direction for 
all public sector reforms supported by the 
World Bank,
 
the European Union (EU), and 
other donors.
 
Both the executive and judicial 
branches of government have introduced their 
own e
-
government portal
s, with a growing 
number of services and an increasing amount of 
information available online.
 
 
 
INFRASTRUCTURE DEVELOPMENT
 
 
Energy
 
 
Armenia’s energy sector has moved from 
severe crisis to a state of stability
 
that is more 
characteristic of developed count
ries than 
A combination of policy, 
legal, regulatory, and institutional reforms has 
rendered remarkable results, as improvements in 
operating efficiency have helped create 
commercially viable service providers, a decrease 
in technical and
 
nontechnical line losses, and an 
increase of nearly 100 percent of sales in 
collections as of December 2013.
 
 
However, Armenia faces three principal 
challenges in meeting these energy sector 
objectives
: (i) an emerging supply gap
;
 
(ii) the 
need to maintai
n energy supply reliability; and (iii) 
the need to maintain affordable tariffs
.
 
P
oor 
households 
spend
 
around 15
 
percent
 
of their 
disposable income on energy
.
 
 
 
2
 
 
equity (RoE) at 6.
4
 
percent
. The financial 
performance of the sector must be carefully 
monitored in light of continued foreign exchange 
and liquidity pressures driven by lower remittances 
and 
higher NPLs. 
 
 
The CBA has undertaken a number of 
measures to mitigate the negative impact of 
exchange rate volatility, foster banks’ 
capitalization to offset growing NPLs
,
 
and 
contain price inflation.
 
Specifically, at the end of 
2014
 
to 
early 2015
, the
 
CB
A
:
 
(i) increased the 
mandatory reserve requirements for commercial 
banks in foreign currency from 12 percent to 24 
percent; (ii) increased 
the 
refinancing rate by 375 
basis points in 
three
 
stages; and (iii) increased 
bank
s’ minimum capital requirement six
f
old 
effective 
from
 
January 1, 2017.    
 
 
External Sector Performance 
 
 
The trade deficit narrowed by 0.9 percent in 
2014. 
The 
largest reduction came from higher net 
exports of processed food
, 
due to the unilateral 
waiver of export dut
ies
 
on natural gas and
 
oil 
products by Russia (
see 
figure 
3
). 
At the same 
time, low growth
,
 
remittances (which fell 10 
percent over the course of 
2014
)
,
 
and the 
adjustment in the exchange rate helped reduce 
imports.
 
 
Figure 
3
. 
Merchandise Exports by Major 
Categories 
(
US$)
 
 
 
In
flows of 
foreign direct investment 
(FDI) 
did 
not improve in 2014
. 
In the first 
nine months
,
 
net
 
inflows of FDI amounted to
 
US$359.3 
million, or
 
4.8
 
percent of GDP.
 
However, the 
bulk of those investments were earnings accruing 
to Russian investors engaged i
n the energy sector. 
The energy sector attracted almost 40 percent of 
FDI inflows
. 
 
 
The stock of external public debt decreased 
by 
2.7
 
percent from January to 
September
 
2014 
and reached US$3.
3
 
billion
. During the first 
nine
 
months 
of the year, the 
CBA rep
aid around 
US$66
 
million of the Stand
-
by Arrangement with 
 
(IMF)
, which 
accounted for the bulk of 
the 
decrease 
in
 
the 
CBA’s obligations to multilaterals. Those declined 
by 8.
3
 
percent in the reporting period and 
contributed 0
.9 percentage points to the overall 
decline of external public debt. 
 
 
Outlook and Risks
 
 
Economic contraction in Russia 
represents 
a 
significant downside
 
macroeconomic risk for 
Armenia
 
in 2015
. 
The 2014 
slowdown of 
economic activity in Russia
—
the 
key dest
ination 
for Armenian labor migrants and the largest 
market for agricultural and manufacturing exports
 
—
has already 
led to a contraction in 
remittances, 
export
s
,
 
and FDI. Armenia is also heavily 
dependent on copper exports 
and thus susceptible
 
to base metal
 
prices
, which
 
are likely to 
continue 
to 
decline over the medium term. 
 
 
Financial Sector 
 
 
 
Armenian banks remain severely exposed to 
currency
-
induced credit risk and 
AMD
 
funding constraints.
 
Despite 
heavy dependence 
on foreign currency deposits and exter
nal funds
 
from parent banks and international lenders, local 
currency lending 
gr
e
w until mid
-
November 2014
, 
with a negative impact on 
dollarization
.
 
The AMD 
lost about 14 percent of its value against 
the 
U.S. 
d
ollar 
(December 2014 vs
.
 
2013). 
As of 
December
 
2014, 
foreign currency
–
denominated 
deposits 
year
-
on
-
year 
grew by 1
1
 
percent and 
reached
 
7
2
 
percent of total deposits
, while foreign currency
–
denominated loans increased by 30 percent year
-
on
-
year and reached 66 percent of total loans
. 
 
 
The Armenian finan
cial sector 
remains 
heavily dominated by the banking sector, 
which 
comprises 21 private and 
one 
development bank
,
 
accounting
 
for 92 percent 
of financial sector 
Fifteen 
foreign
-
owned 
banks dominate the banking sector
,
 
with
 
a
 
70
 
percent market share 
in total assets and 
73
 
percent 
in statutory capital. Ameriabank is the 
largest bank 
in terms of assets, with 
a market share in June 
2014 of
 
11.7 percent in assets, 13.9 percent in 
loans, and 
13.5
 
percent in deposits. Market
 
0
20
40
60
80
100
120
140
160
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
March
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2013
2014
Gold&jewelry
Machinery&equipment
Metals&minerals
Other primary
Manufacturing
1
 
 
 
RECENT ECONOMIC AND 
SECTORAL DEVELOPMENTS
 
 
Growth Performance
 
 
Low growth continued during 2014. 
After 
losing steam toward the end of 2013, the economy 
slowed further to around 
3.4
 
percent in 2014 (
see 
figure 1)
,
 
as 
the 
d
ecline in 
the 
construction 
and 
mining sectors more than offset 
the 
growth in 
agriculture, manufacturing
,
 
and services.
 
 
Figure 1. Real GDP Growth (percent)
 
 
 
Indu
stry as a whole stagnated in the same period
.  
The 
mining
 
sector shrank by 5.8 percent
, 
and 
the 
energy sector experience
d an 
even larger decline 
(
15.1
 
percent).  J
ointly
, these losses
 
offset 
the 
7.7 
percent 
contribution to growth 
from 
manufacturing
.
 
In 2014
,
 
growth was mostly driven 
by the 
non
-
tradable sectors (
see 
figure 2).
 
 
Figure 2. Contribution of Tradable and Non
-
Trad
able Sectors (percentage points)
 
1
 
 
 
Inflation and 
 
 
 
Annual 
consumer price index (
CPI
)
 
inflation 
was 4.6 percent in 2014, well within 
the 
2.5
–
5.5 
Food 
prices grew by 6.2 
                                        
                  
 
1
 
For the analysis in this section, tradable branches are 
industry and agriculture, 
and 
non
-
tradab
le branches 
are 
construction and services.
 
percent and contributed 3.0 percentage points to
 
inflation
. Interventions by the 
Central Bank of 
Armenia (
CBA
)
 
have 
limited depreciation and led 
to a
n
 
appreciation in the real effective exchange 
rate
 
that 
might
,
 
however
,
 
hinder export 
 
 
Fiscal Performance
 
 
The fiscal deficit contracted i
n 2014.
 
Under
-
execution of spending led to 
a surplus in the 
state 
budget during the first nine months of 
the year
. 
Overall tax revenues grew by 5.0 percent in 2014
. 
I
ndirect taxes 
also 
grew
,
 
mainly due to higher 
value added tax (
VAT
)
,
 
the
 
excise 
tax 
on tob
acco
,
 
and changes in personal income taxation and 
mining royalties
.
 
 
Armenia’s borrowing capacity in 2015
–
16 
might be constrained by legally defined fiscal 
rules on debt thresholds
. 
Actual indicators for 
2013 and World Bank staff estimates for 2014
–
15 
sugg
est that by the end of 2015
,
 
Armenia’s public 
debt
-
to
-
GDP ratio might exceed 50 percent. This 
implies that the 
G
overnment 
might
 
be obliged to 
declare a moratorium on new borrowing in 2016 
to comply with the 
Eurasian Economic Union 
(
EEU
)
 
Membership Agreemen
t
, i.
e.
,
 
draft 
a
 
state 
budget for 2016 
that
 
limit
s
 
the budget deficit 
to 
well below 3 percent of the average GDP for 
2012
–
14. Alternatively, the 
G
overnment may seek 
Parliament’s approval of legislative amendments 
to expand the borrowing space for providing
 
a 
fiscal impulse. 
 
 
Financial Sector Performance
 
 
Armenian banking sector
 
 
continued to 
grow rapidly in 2014, 
even though 
the sector’s 
stability and resilience 
were 
tested in the 
fourth 
quarter 
by
 
the 
nominal 
depreciation of the 
Armenian 
dram
 
(AMD) 
and the lower inflow of 
remittances from Russia
.
 
According to the CBA
, 
assets of Armenia’s banking system accounted for 
69
 
percent
 
of GDP
 
and loans accounted for 42.1
 
percent
 
of 
GDP in December 2014, and 
the share 
of 
nonperforming loans (NPLs) increased to
 
7.0 
percent
 
compared to 4.5 percent in December 
2013. The aggregate capital adequacy ratio (CAR) 
of Armenian banks declined 
to 14.5 percent 
compared to 16.7 percent at the end of 2013. 
However, the 
country’s
 
banking system 
thus far 
remains well capitalize
d above the minimum 
required 12 percent CAR, with the return on 
-15
-10
-5
0
5
10
15
2007
2008
2009
2010
2011
2012
2013
2014
-15
-10
-5
0
5
10
15
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Tradable
Non-tradable
0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
World Bank Group 
–
 
Armenia Partnership
   
April 
2015
 
 
COUNTRY PROGRAM SNAPSHOT