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World Bank Supports Community Investments that Target the Poor in Armenia

February 25, 2010

WASHINGTON, February 25, 2010―The World Bank’s Board of Executive Directors today approved a US$7 million credit for the Second Additional Financing for the Social Investment Fund III (ASIF III) Project for Armenia. The Additional Financing will assist the Government of Armenia in its efforts to improve the living standards of the poor and vulnerable groups by expanding labor-intensive infrastructure projects.

The Project will focus on “infrastructure gaps”, or schools, kindergartens, potable water pipelines, community centers, and primary health clinics or ambulatories in need of repair or reconstruction throughout Armenia. The situation in Armenia’s rural areas, especially in remote and isolated communities, and the earthquake zone, is particularly severe.  The Project targets those populations most affected by the economic crisis, and the Additional Financing will help to meet these and other needs over the medium-term as part of the Government’s anti-crisis measures.

“The main strength of ASIF is in its approach to enable local communities to identify their own investment needs,” said Asad Alam, World Bank Regional Director for the South Caucasus. “While this creates much-needed jobs in the current environment, the success of the program will also depend on how well local communities are able to sustain these new investments.”

ASIF has successfully been in operation for the last decade. So far, 737 micro-projects in 298 rural and 74 urban communities, including the capital Yerevan, have been completed under the project, reaching out to 2.7 million beneficiaries across Armenia. The Additional Financing will support infrastructure improvements in 35 communities, and will create short-term employment of up to 68,600 days of labor.

The ASIF III Project has two main components. It supports community investments in the poorest communities of Armenia through basic small-scale social and economic infrastructure rehabilitation. These investments are made based on the community-driven development approach where communities are responsible for identifying their own priorities, contributing to the financing of their micro-projects, and maintaining them after project completion.

The ASIF III Project also complements community investments through local-level institutional strengthening and capacity building for improved management, monitoring, and evaluation.

The Additional Financing will provide funding for infrastructure rehabilitation dependent on its crisis-response nature, including the need to create employment while improving basic social and economic infrastructure.

“By the time the Project is completed, around 235 of the most needy communities will have benefited from newly constructed and renovated schools with heating; specialized schools for orphanages, handicapped children, and art students; sports facilities; community centers; and potable water in homes,” said Ivan Drabek, head of the World Bank team designing the project.

The IBRD Flexible loan has a maturity of 25 years and a grace period of 10 years included.

Since joining the World Bank in 1992 and IDA in 1993, the commitments to Armenia total approximately US$ 1.3 billion.

Media Contacts
In Yerevan
Vigen Sargsyan
Tel : (374 10) 520-992
In Washington
Michael Jones
Tel : (202) 473-2588