Journal № 2 (16) 2022
Since the formation of the Eurasian Development Bank, the majority of its current investment portfolio has been held by the majority shareholders. This is due to the stable demand for investments and well–developed rules for financing projects of the two economic leaders of the EAEU - Kazakhstan and Russia. However, in recent years, there has been a growing demand for investment in countries with "small economies" – both within the framework of projects for achieving sustainable development goals and in the field of ecosystem development for business.

Consequently, developing the EDB Strategy for 2022-2026, we particularly focused on the needs of our minority shareholders in Armenia, Kyrgyzstan and Tajikistan. And the first results of this approach are already there.

After the Republic of Armenia joined the Bank in 2009 and contributed 100 thousand US dollars to the authorized capital, a total of more than 420 million US dollars were sent to the Republic for the implementation of 20 projects. At the same time, activity has increased significantly in recent times – the projects share in Armenia in the current investment portfolio of the EDB has increased by 4 times compared to the beginning of 2021

Today, the EDB country strategy for the Republic of Armenia defines 5 key tasks and a number of priorities for work until 2026.

Firstly, the EDB provides assistance to the sustainable infrastructural development of the republic. The Bank's task is to support projects for the construction and modernization of basic infrastructure that ensures energy security, transport accessibility of the country and sustainable economic development. Among other things, this includes the development and modernization of energy infrastructure, taking into account the diversification of sources of electricity generation and the implementation of RES projects.

Secondly, the EDB aims to promote the diversification of Armenia's industry and export. The priority sector, which has a clear export potential, is the agro-industrial complex.

Thirdly, the Bank focuses on ensuring the country's food security - this is a necessary condition for Armenia's sustainable economic development in the long–term strategic period. The main task of the EDB is to ensure a balanced volume of import and own production of key agro–industrial goods, the development of a distribution network that ensures food supplies, as well as the maximum use of the collective resource of the EAEU countries to solve the problem of uninterrupted supply of affordable food.

Fourthly, the Bank is faced with the task of developing the financial market and the availability of financial services in Armenia. The EDB continues to work with banks to support targeted loan programs.

Fifthly, the EDB, using the competencies of its Digital Initiatives Fund, provides assistance in the field of digital transformation of the economy and public administration sector of the Republic of Armenia.

In 2022, we have already approved for implementation a number of projects with a total investment of about 180 million US dollars in such areas as small renewable energy generation, electrical production, agriculture and food production.

On August 5, the EDB, the Government of the Republic of Armenia and CJSC “Yeremyan Farm”, one of the leaders of the Armenian food industry, signed a Memorandum of cooperation in the field of agriculture. The purpose of the Memorandum is to ensure food security and sustainable economic development of the republic in the field of agriculture. The EDB will provide assistance to the Government of Armenia through financing projects in the field of agriculture, contributing to the deepening of raw materials processing and increasing the value added of manufactured products.

At the same time, the EDB began financing the investment project of Yeremyan Projects Group of companies in the field of agriculture and food production. The Bank will allocate US$ 25 million for the development of a full production cycle, including the replacement of low-income animals with breeding cattle, the expansion of agricultural areas for the production of fodder crops, the modernization of assets in order to increase the production of meat and dairy products. A dairy farm for 1.2 thousand heads and a pig farm for 6 thousand heads will be built. Thus, the increase in milk production will be up to 11 thousand tons, that is, an additional 1.6% per year. In turn, increasing own 50 capacities can potentially contribute to import substitution and improve the level of milk supply in Armenia by 1.4% (the current level is 82%).

In addition to the obvious business results, this project also has social effects. 36% of the Armenian population lives in the rural areas of the region of its implementation. 300 new workspaces will be created there.

As part of the program for the introduction of international standards of management in the electric power industry in the Republic of Armenia, the Bank will allocate US$ 30 million for the modernization of infrastructure and production of metering devices. This will significantly increase energy efficiency at the country-wide level. For us, as for the Institute of Economic Integration of the EAEU+, it is important that the suppliers of components from other countries of the macroregion participate in the project.

Among the promising projects in the field of RES is the construction of 11 solar power plants with a total capacity of 55 MW in Geharkunik and Aragatsotn regions.

All this leads us to achieve the main five-year goal in the Republic of Armenia – to contribute to solving the tasks of the national development agenda. Together with the private sector, the leaders of our industries, we will continue to implement projects in infrastructure, export–oriented production, food security, financial services and digitalization. The number of new investments in Armenia over 5 years will amount to more than $ 300 million.

We have adopted similar strategies for other countries, focusing on the challenges their governments are facing, the needs of countries and regions our analysis revealed.

In addition to country strategies, the tool for achieving strategic goals is the implementation of investment megaprojects, such as:

  • Eurasian Commodity Distribution System – in the field of food security and agricultural export development;
  • Eurasian Transport Framework – in the field of logistics routes development and cargo transportation;
  • Central Asian Water and Energy Complex - its development will balance the energy and water needs of the entire region.

As a result, the total volume of the EDB investments in the economies of all 6 participating countries will amount to at least $10.9 billion following the implementation of the approved 5-year strategy.