The Eurasian Development Bank (EDB) has declined to finance the development of the Amulsar gold mine in Armenia, prompting the Armenian government to seek alternative funding through local banks backed by state guarantees, according to CivilNet.
Armenian Minister of Economy Gevorg Papoyan confirmed that the loan proposal had not been approved. Despite this setback, the government is exploring options to secure funding through Armenian banks, with guarantees provided by the state.
In February 2023, a memorandum of understanding was signed between the Ministry of Economy, Lydian Armenia, and the EDB. The agreement envisioned a $250 million financing package: $100 million from the EDB, $50 million from a local bank, and $100 million raised by Lydian Armenia. The memorandum also included a provision for 12.5% of Lydian Armenia's shares to be transferred to the Armenian government as a gift.
Responding to CivilNet's inquiry, the EDB stated that Lydian Armenia had withdrawn its loan application, halting all internal bank evaluation procedures. The process of transferring a 12.5% stake to the government was reportedly postponed multiple times, raising questions about the project's financial viability.
Currently, the Armenian government is auditing Lydian Armenia before extending state guarantees. Minister Papoyan emphasized the importance of a thorough review, stating that future generations would bear the consequences of such decisions.
Lydian Armenia's CEO, Hayk Aloyan, refrained from commenting on the withdrawal of the loan application but assured that the company would address outstanding concerns soon.
The EDB, co-founded by Russia and Kazakhstan and comprising six member states, initially planned to conduct an additional environmental assessment of the Amulsar project. However, this initiative did not progress, as noted by Denis Ilin, EDB's Deputy Chairman, in May 2023.
Despite funding challenges, Minister Papoyan expressed optimism that construction at the mine could begin in Q1 2025, with mining operations starting by Q4 2025.
Amulsar gold mine, managed by Lydian Armenia (a subsidiary of Lydian International), is situated at the junction of Vayots Dzor and Syunik provinces. The project faced prolonged delays due to protests from environmental activists and local residents. The Armenian government hopes its revival will improve the country's economic outlook in the coming year.
