WASHINGTON, November 30, 2010 – The World Bank Board of Executive Directors today approved a US$ 24 million loan for the E-Society and Innovation for Competitiveness (EIC) Project for Armenia. This highly innovative project will assist the Government of Armenia in its on-going efforts to address constraints to competitive e-Society and enterprise innovation in Armenia by strengthening the underlying infrastructure and enabling environment. The Project is well aligned with the Government’s vision towards an inclusive e-society, outlined in the IT Sector Development Concept Paper.
The Project is specifically designed to address the numerous challenges in the Information and Communication Technology (ICT) sector in Armenia and promote enterprise innovation. It supports measures aimed at increasing access to affordable broadband services for citizens, businesses and public institutions (through development of Nationwide Broadband Backbone and Government Network); equipping citizens and businesses with a tool for authentication of electronic transactions (Digital Citizen Program); and increasing access to affordable computers as well as e-services for citizens (Computer for All Program).
The EIC Project will also promote the creation, growth and competitiveness of knowledge and technology-driven enterprises while at the same time encouraging traditional sectors to adopt new technologies. This will stimulate the rate of technology absorption, innovation and commercialization in the private sector, foster collaboration between research and industry, promote the development of new knowledge- and technology-driven companies across Armenia. Establishment of Gyumri Technology Center will provide firms and entrepreneurs access to know-how, services and facilities which are currently unavailable in this region.
“This innovative project seeks to unleash ICT as a new driver for growth and job creation in Armenia,” says Asad Alam, World Bank Regional Director for the South Caucasus Countries. “Improved access to computers and high speed internet connectivity will help boost economic productivity, spur innovation, raise incomes of families and small businesses, and help create jobs.”
“Despite the promising developments in the last few years, major challenges remain for the sector,” says Juan Navas-Sabater, Head of the World Bank Team that designed the project. “The level of internet penetration, or access to broadband, is currently at an insufficient level to achieve the government’s aspirations of a modern Information Society. The inequalities in access to modern ICTs between the capital city and rural areas are compounded by high prices for advanced services, due to the lack of competition in access to international telecommunication networks and a lack of investment in domestic backbone networks.”
Among other impediments that the Project aims to address throughout its implementation with the joint efforts of the Government, private sector, and the World Bank team are: lack of coordination of ICT-based development activities; low level of PC penetration, which is lower in Armenia than in other countries of the region; unaffordable prices for even low-end computers; migration of young talent; weak local entrepreneurship; low access to credit and commercial investments.
Total financing of the Project is US$ 30 million, of which the Government of Armenia will finance US$ 6 million from its own resources. The IBRD Specific Investment Loan of US$ 24 million 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, 389, 600 million.