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1 Technical Assistance by Eastern Partnership Trust Fund (EPTATF) Yerevan 18 November 2016 European Investment Bank

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1

Technical Assistance by Eastern Partnership Trust

Fund (EPTATF)

Yerevan

18 November 2016

European Investment Bank

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EIB Rural Framework Loan

The Eastern Partnership Technical Assistance Trust Fund (EPTATF) 1

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3

EPTATF

WATER TRANSPORT ENERGY URBAN SMES MULTI-

SECTOR

Geographical Coverage

Georgia

Armenia

Azerbaijan

Moldova

Ukraine

Priority Sectors

EPTATF at a Glance

Established in 2011

Objective - To improve the quality and development impact of EIB’s operations

EPTATF is aligned with the European Neighbourhood Policy and the high level objectives of the EIB in the Eastern Partnership countries: ₋ foster democratic development and good governance, ₋ promote regulatory reform and administrative

capacity building, ₋ reduce poverty ₋ support economic growth.

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EPTATF Funding and Scope

Use of Funds Contributors

Contributor Amount (EUR m)

Austria 11.00

France 0.80

Latvia 0.10

Poland 1.00

Sweden 11.55

Germany 1.82

Lithuania 0.15

United Kingdom 1.37

Totals 27.789

Identification

E.g. sector and

master plans

Preparation

Pre-feasibility or

feasibility studies;

technical, economic

and financial

appraisals, including

environmental &

social impact

assessments

Implementation

Strengthening project

management, skills

and capacity building

in e.g. technical,

procurement,

financial and

organizational

functions.

Technical Assistance 1

Capacity Building and Other Regional Support 2

Institutional capacity-building programmes,

e.g. trainings and secondments.

For additional information, please visit: http://www.eib.org/projects/regions/eastern-

neighbours/instruments/technical-assistance/index.htm

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EPTATF - Operations

Distribution of TA funds between beneficiary countries

Distribution between sectors

EPTATF operations per country

(amounts approved)

EPTATF operations per country

(operations approved)

Insitutional, 20%

Environment, 35%

Transport, 26%

Energy, 10%

SMEs, 10%

Sector distribution

(amounts approved)

EPTATF operations per country

(operations approved)

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2

5 6

13

0

2

4

6

8

10

12

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Armenia Azerbaijan Georgia Moldova Ukraine

Georgaphical Distribution, Secondees and Trainees

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EPTATF Results

Main Results

TA Operations Support EIB Loans Amounting to EUR 1.7 billion

11 Secondees and 21 Trainees are supported by the Capacity Building Programme

Status

Currently, 8 Secondees are supported by the Programme and 24 Secondees and Trainees have

already successfully completed it.

23 TA operations amounting to EUR 24.3m have been approved since 2011

18 TA operations supporting project preparation and implementation

2 regional studies in energy efficiency and SME support

Internship and Secondment programmes

Cross-regional awareness raising (dissemination window) and TA acceleration

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EPTATF in Armenia

M6 Interstate Road

EUR 1,000,000

Water sector assets valuation and registration

support EUR 700,000

Loan implementation

support EUR 500,000

Rural Framework Loan

EUR 1.500,000

Finalized: Feasibility Study, Preliminary Engineering, Project Scoping, Detailed Engineering Design, ESIA, Bidding Documents

EIB loan of EUR 51m signed

Completed and Fully Disbursed

The aim is to assist Government of Armenia in implementing the water sector reforms

(new PPP transaction) through valuation and registration of fixed assets

EIB Loans in the past amount to EUR 37m; additional EUR 30m loan planned for 2017

In Progress

The aim is to promote the development of the private sector by supporting financial

intermediaries to develop a SMEs credit portfolio as well as to improve SMEs

“Financial Literacy”

EIB Loan for EUR 50m is fully disbursed; another EUR 50m loan has just been signed

In Progress

In Progress

Supporting the Promoters in preparation and implementation of specific sub-projects

to be financed by the Loan

EIB Rural Framework Loan of EUR 50m

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The Eastern Partnership Technical Assistance Trust Fund (EPTATF)

EIB Rural Framework Loan 2

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Background

The dominant sector of the Armenian economy

Contributes 20% of GDP, 40% of employment and 28% of total exports in 2015

Dating back to Soviet times

Highly inefficient and at the end of its economic life

Inadequate for the smallholder agriculture prevailing in the country

High levels of water losses, low value crops and little output for farmers

Many irrigable areas not effectively irrigated

Donors focusing almost exclusively on rehabilitation of primary and secondary

irrigation canals thus not ensuring all potential efficiency gains are passed on to

farmers through rehabilitation of tertiary canals and on-farm systems

EIB EUR 50m Rural Framework Loan aims at improving irrigation and other rural infrastructure in several regions of Armenia: – reducing water losses caused by ageing infrastructure and outdated technologies – increasing the resource-efficient production of quality agricultural produce – ensuring finance for the last mile investments required to bring benefits of water savings to the on-farm point of application

Agriculture – Dominant Sector

Inefficient and Old Irrigation Systems

Donors Focusing on Main

Infrastructure

EIB Support – Innovative Approach

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Tertiary and on-farm

irrigation systems

Primary and secondary

canals

Loan proceeds for WUAs

and farmers infrastructure

Loan proceeds for

public infrastructure

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EIB Rural Framework Loan

BORROWER

Ministry of Finance

IMPLEMENTING ENTITIES

Water Sector PIU & RAED PIU

Loan

PUBLIC

INFRASTRUCTURE

Repayment by WUAs /farmers

to Ministry of Finance

“Payback mechanism”

To be potentially supported by a

guarantee “PRIVATE”

INFRASTRUCTURE Farmers & Water Users Associations

Loan reimbursement

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The EPTATF Technical Assistance

Milestones

Deliverables

EUR 1.5 million approved by EPTATF

Estimated start of the assignment February 2017

Estimated end of the assignment January 2020

Environmental and Social Management Plan and

Resettlement Framework Policy

Project Implementation and Procurement Manuals

Sub-project eligibility criteria, Selection Plan and Call for

Sub-project Proposals

Feasibility assessment and prioritization of the sub-

projects

Concept designs of main, tertiary and on-farm irrigation

schemes investments

Review and improvement of detailed engineering designs, tender documentation and environmental and social

management plans

Progress reports demonstrating engagement

and capacity building of beneficiaries (WUAs and

farmer groups) in the use and maintenance of the new

irrigation systems

Enhanced project implementation, monitoring,

assessment and rating of quality of works

1 2 3 4

5 6 7 8

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Advantages and Value Added of the project

Innovative Approach

Cultivation of Higher

Value Crops

5.000 ha of Agricultural

Land

Extended Repayment

Period

New System Operation

Support

Group Procurement

Less Cost

Advantages and

Value Added

Reduction of water losses improve water availability throughout the production cycle enabling the cultivation of higher value crops

Support upgrades to irrigation infrastructure servicing approximatively 5.000 ha of agricultural land.

Maximise the impact on small and medium agricultural producers

Ensure potential efficiency gains from system upgrade are passed on to the farmer

Support rehabilitation of main and secondary irrigation canals as well as investments in tertiary and on-farm systems

Farmers are expected to repay their contributions over an extended period of time

Two PIUs will procure the equipment and benefit from significant cost reductions for individual land plots

Farmers will benefit from project implementation and new system operation support

Introducing an innovative approach to addressing urgent rehabilitation needs of outdated and inefficient irrigation systems

PIUs and beneficiary Water Users Associations ensuring successful transfer and adoption of the new technologies to farmers

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Thank you for your attention!

Marion Hoenicke

Head of Division Lending Operations in Neighbouring Countries, Banks

Phone: (+352) 4379-87406

email: [email protected]

European Investment Bank

98-100, boulevard Konrad Adenauer

L-2950 Luxembourg.

Violaine Silvestro

Senior Loan Officer Lending Operations in Neighbouring Countries, Public Sector East

Phone: (+352) 4379-84809

email: [email protected]

European Investment Bank

98-100, boulevard Konrad Adenauer

L-2950 Luxembourg.