The Eurasian Development Bank (EDB) plans to provide Armenia with a $200 million loan for the construction of the Kajaran Tunnel as part of the "North-South" road corridor.
On July 25, the Armenian government will consider approving the signing of the loan agreement with the EDB. The project involves the construction of a 7-kilometer tunnel and the reconstruction of 4 kilometers of access roads. The total cost of the project is estimated at $370 million, with an implementation period of about six years.
The main goals of the project are to increase the potential for transit transportation and reduce accidents on a critical section of the North-South transport corridor. This should contribute to the region's economic development and improve road safety.
The loan from the EDB will be provided on favorable terms: at an annual interest rate of 4% with a repayment period of 20 years. Additionally, the Armenian government plans to attract an additional $100 million loan from the Eurasian Stabilization and Development Fund for budgetary support on similar terms.
Earlier, BMG reported that "North-South" is the largest investment transport project in the history of independent Armenia. It began construction in 2009 with the aim of connecting the south of the country with the north. This will create an international transport corridor providing uninterrupted transportation of goods from the Persian Gulf to the Black Sea.
Currently, the country's territory with a population of three million is crossed by road transport on average in 11 hours. The new 556-kilometer corridor is expected to halve this time.
Despite the project's importance for Armenia, "North-South" is being built very slowly. The construction of the highway was supposed to be completed by 2019, but so far only 5-6% of the route's length has been put into operation.
Authorities hope to complete the highway construction within 8-9 years.
