German KfW bank and Armenian Central Bank sign 20 million euro loan agreement

19.04.2010 16:49
German KfW bank and Armenian Central Bank sign 20 million euro loan agreement

YEREVAN, April 19, /ARKA/. The German KfW bank will provide Armenia’s Central Bank with a 20 million euro worth loan as part of Housing Financing Project implemented by the German-Armenian Fund. The agreement was signed today in Yerevan. Central Bank governor Arthur Javadian said the loan is repayable in 10 years with a 3-year grace period. He said the loan will be on-lent within three next years.

In 2006, in response to an invitation issued by the government of Armenia, KfW bank took the role of lead donor in moves to introduce long-term, low-interest mortgages in Armenia. German Financial Cooperation has made available a loan of EUR 12 million and a grant of EUR 1.5 million, making it possible for Armenians to take out long-term loans that will allow them to modernise their homes and buy property.

Arthur Javadian said today the on-lending will start in 3-4 months after all formal procedures are over, including a parliament ratification. He said the loan is provided at market interest rates, but since part is subsidized by the German government, they are preferential being within 3%. He said the interest rate is fixed and not subject to changes. He added also that loan will be on-lent to Armenian commercial banks at 8.25% interest rate, but this may change depending on the market situation.

Eva Witt, KfW vice-president, said signing of the loan agreement is an important event for KfW within the frameworks of German-Armenian cooperation.

German KfW bank has been assisting Armenia to implement different projects since 1995. The main sectors of its activity in Armenia are energy, drinking and waste water systems as well as private sector and financial and banking system. Since 1995 KfW has committed 400 million euros worth assistance to Armenia. Within the frameworks of Armenian-German financial cooperation KfW will have provided Armenia with 110 million euro assistance in 2009 and 2010. -0-


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