The French Development Agency (AFD) will provide a €250 million loan to Armenia.

Axar.az reports, citing Armenian media, that the Armenian government approved the relevant agreement at Thursday’s Cabinet meeting.

This funding will be the first sub-program being implemented within the framework of a new three-year program co-funded by the AFD and the Asian Development Bank (ADB).

It is based on Armenia’s public finance management and financial markets development policies and is a continuation of previously implemented budget support programs in the country.

The main objectives of this program are to ensure responsible management of Armenia’s public finances, which will contribute to the implementation of high-quality and sustainable public spending and investments, as well as to reduce Armenia’s dependence on external funding by strengthening its domestic resource mobilization and creating a more favorable business environment in the country.

The reforms envisaged within the framework of this program are set out in the policy table and will be implemented through three consecutive sub-programs in accordance with the logic of continuity.

These budget support funds will be used to fund the deficit defined in the law on the state budget of Armenia for 2026.

This program is a budget support loan agreement and, therefore, does not expect co-funding from the state budget of Armenia.