ArmInfo. On December 11, the Armenian government approved a draft law ratifying the loan agreement 'Armenia Water Supply and Irrigation Services Enhancement Project: Phase 1' (WISE) between the Republic of Armenia and the International Bank for Reconstruction and Development (IBRD - the main lending arm of the World Bank Group).
As stated in the explanatory note to the document, the Republic of Armenia and the International Bank for Reconstruction and Development (IBRD) signed the corresponding loan agreement on September 11 and 18, 2025.
According to the Agreement, the Bank will provide the Republic of Armenia with ?70.4 million to finance the Project, and the Government of the Republic of Armenia will co-finance taxes, duties, operating expenses related to the Project, and other costs not eligible for financing by the loan.
The Loan Agreement is valid for 180 days from the date of its signing, and the Project is valid for five years from the effective date. The effective date of the Co-financing Agreement is March 31, 2026.
The Project consists of the following main components: water sector reform and institutional strengthening for climate-resilient irrigation, rural water supply, and sanitation systems; improvement of rural water supply and sanitation; modernization of irrigation infrastructure and system management; and project management.
The project is also expected to be co-financed by the French Development Agency (Agence Francaise de Developpement).
It is noted that given the multifaceted and interconnected nature of the challenges facing the water sector in Armenia, including aging irrigation infrastructure, limited access to safe water for the rural population, and growing risks associated with climate change, the proposed WISE project aims to apply an integrated, multi-phase approach to ensure sustainable development and effective management of the sector. The project is a logical continuation of previous World Bank-financed initiatives and will ensure the implementation of necessary policy, institutional, and infrastructure reforms.
The project is expected to result in the introduction of climate-resilient irrigation and water supply systems, which will contribute to economic growth, food security, and balanced regional development.
In June, ArmInfo reported that the World Bank's Board of Directors approved the first phase of a large- scale $435 million program aimed at improving water supply and irrigation systems in rural and underserved areas of Armenia. The program, scheduled for 2025-2031, will be financed by a loan from the International Bank for Reconstruction and Development (IBRD) equivalent to $80 million. Co-financing will come from the French Development Agency (AfD), the EU, and the Armenian government, totaling $185 million. Over the next 10 years, the total funding will amount to $435 million, the lion's share ($330 million) of which will come from the IBRD.
"The program envisages comprehensive reforms of water resources management enterprises. It encompasses the modernization of irrigation systems and the expansion of reliable water supply in selected rural communities," noted Caroline Guegenat, head of the WB Yerevan office. According to her, infrastructure investments, coupled with governance and policy reforms, will help Armenia address challenges such as droughts, floods, and extreme heat. Overall, the program will improve the quality of life and economic resilience of rural communities.
The first six-year phase of the program will be implemented by the Water Committee of the Ministry of Territorial Administration and Infrastructure of the Republic of Armenia in settlements in the Ararat, Armavir, Kotayk, Aragatsotn, Shirak, and Tavush regions. The initiative aims to modernize infrastructure and strengthen institutions regulating the water sector, in line with Armenia's commitments to reduce greenhouse gas emissions and improve adaptation to extreme weather events. According to the source, approximately 650,000 people in 579 rural settlements in Armenia remain without access to centralized water services because they live in areas not covered by lease agreements for water supply.
It was noted that the World Bank remains committed to supporting Armenia's development, fighting poverty, and creating a more sustainable and prosperous future. Since 1992, the World Bank has provided approximately $3 billion to the country, including investment loans, grants, analytical support, and technical assistance. The current portfolio of the IBRD, trust funds, and the International Development Association (IDA, a World Bank entity) is approximately $400 million. Armenia also became an IDA donor country in 2023.
