The Armenian government has approved a major financial agreement with the European Investment Bank (EIB) to construct a strategically important section of the Sisian-Kajaran highway. The project, part of the international "North-South" transport corridor, aims to significantly enhance connectivity between Iran and Georgia via Armenia.
The 60-kilometer construction project consists of three main segments: a northern section spanning 27.12 km, a central segment featuring the 8.65 km Bargushat Tunnel, and a southern section of 24.25 km. The new highway will include 27 bridges with a total length of 4.7 km and 9 tunnels spanning a combined 12.5 km. The road will feature a width of 11.1 meters, with three traffic lanes, each 3.3 meters wide.
The total cost of the project is estimated at €708 million. Financing will be provided by several international financial institutions: in addition to the EIB, the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB) will each contribute €236 million.
The EIB loan will be offered on flexible terms, with repayment periods ranging from 4 to 30 years and a grace period of up to 5 years. Funds will be disbursed in tranches, with a minimum tranche size of €5 million. The interest rate can be either fixed or variable, linked to the six-month EURIBOR rate.
The project adheres to strict EU environmental standards and includes measures to minimize environmental impact and adapt to climate change. Construction is scheduled for completion by December 2031, with a warranty period lasting until the end of 2033.
Upon completion, the distance between the Iranian and Georgian borders will be reduced to 490 kilometers, cutting travel time by half. This will significantly improve access to Black Sea ports for both Armenia and Iran.
Currently, 10% of the "North-South" corridor investment program has been implemented, with a total of $800.7 million in loans secured to date.
