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05 May 2004
World Bank Approves over $31 Million in Credits for Armenia
Projects will target public sector reform, water services, agriculture
As part of its support for continued structural reforms in Armenia, the World Bank approved three credits on May 4 totaling over $31 million:
-- The $10.15 million Public Sector Modernization Project will support the second phase of public sector reforms, primarily aimed at strengthening the management systems of state institutions, and improving policy development and service delivery processes. The reforms are intended to improve the transparency, accountability and efficiency of public sector management.
-- The $20 million Municipal Water and Wastewater Project will assist the government in improving water and wastewater services outside of Yerevan.
-- The $1.74 million Agricultural Reform Support Project will assist smallholder farmers whose vineyards and orchards were damaged by the frosts of December 2002, and also finance other critical agricultural support services.
Following is the text of the release:
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The World Bank
http://www.worldbank.org
May 4, 2004
WASHINGTON, May 4, 2004-The World Bank's Board of Executive Directors today approved three credits for Armenia: a US$10.15 million equivalent credit for the Public Sector Modernization Project, a US$20 million equivalent credit for the Municipal Water and Wastewater Project, and a US$1.74 million equivalent for a supplemental credit for the Agricultural Reform Support Project.
The US$10.15 million equivalent Public Sector Modernization Project will assist the government in its efforts to improve the transparency, accountability, effectiveness and efficiency of public sector management. This is the first World Bank-supported project focused on public sector reforms. The project will support civil service reforms, and will make specific innovations in core public institutions, which should become a catalyst for further modernization efforts.
While the first phase of public sector reforms in Armenia can overall be considered to be completed, the government is currently entering into the second, more challenging phase of institutional and governance reforms. The project will support the government in implementation of the second phase of public sector reforms, primarily aimed at strengthening the management systems of state institutions, and improving policy development and service delivery processes both at central and local levels.
The US$20 million Municipal Water and Wastewater Project will assist the Government in its efforts to improve water and wastewater services, in terms of coverage, quality and efficiency with a focus on areas outside the capital city. It is the second IDA-financed water and wastewater project in Armenia, after an initial Municipal Development Project (MDP) to support Yerevan's Water and Sanitation Company. The Municipal Water and Wastewater Project will build on the accomplishments of the Yerevan MDP and continue sector reforms beyond the capital city by strengthening the Armenia Water and Sanitation Company (AWSC) through financial and technical rehabilitation of Armenia's water and wastewater systems.
The project will extend improvements recently achieved in Yerevan to other parts of the country, and will lead to several key technical and commercial outcomes. It will improve the reliability and quality of drinking water, increase hours of service, and provide for greater operating efficiency. In addition, the project will result in improved relationships with customers, capable management and qualified staff, and increased water company cash generation through reform of billing and collection.
The US$1.74 million supplemental credit for the Agricultural Reform Support Project will finance assistance to smallholder farmers whose vineyards and orchards were damaged by the frosts of December 2002 as well as continued operation of critical agricultural support services. This includes about 1,000,000 grapevine seedlings and 400,000 fruit tree seedlings for the rehabilitation of about 370 ha of smallholders' vineyards and 1,130 ha of smallholder's orchards; continued operation of the rural extension service and the regional agricultural service centers; the adaptive and applied agricultural research program; the integrated pest management (IPM) program; and the market information service until June 2005.
The orchard and vineyard replanting program will benefit up to 10,000 of the most severely affected small farmers, helping them to recover from the devastation of their grapevines and fruit trees and to upgrade the genetic diversity and quality of their grape and fruit tree stock. The continued funding of essential agricultural support services will ensure that farmers continue to receive the critical advisory, information and technical assistance needed to improve their productivity and incomes. The original IDA Credit for the Agricultural Reform Support Project, for US$14.5 million, was approved in 1998.
The credits will be made to Armenia on standard IDA terms, including 40 years maturity and a 10-year grace period. Since joining the World Bank in 1992 and IDA in 1993, commitments to Armenia total approximately US$786.9 million for 33 operations.
For more information on the World Bank's activities in Armenia, please visit:
http://lnweb18.worldbank.org/eca/armenia.nsf
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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
