Armenia’s government on Thursday approved a proposal to sign an agreement with the French Development Agency, AFD, for a €250 million credit line. The funds are expected to be used to finance the state budget deficit.
According to the justification attached to the decision, the credit line will become the first sub-program of a new three-year budget support program co-financed by AFD and the Asian Development Bank, ADB. As part of the co-financing package, ADB plans to provide Armenia with up to $250 million.
The program envisages reforms in public finance management, improving the efficiency of public spending and investment, mobilizing domestic resources, enhancing the business environment, developing the private sector, managing public debt, and deepening financial markets.
The AFD loan is planned as a single tranche with a 20-year maturity and a five-year grace period. Repayment of the principal is to be made in 30 equal semiannual installments.
Armenia will be able to choose either a floating or a fixed interest rate. The floating rate will be calculated as six-month EURIBOR plus 2.3 percentage points. As of September 11, 2026, that rate stood at 5.12% per annum. The first stage of the program covers the period from November 2025 to September-October 2026.
