A resilient economy, strong human capital, and a vibrant private sector form the foundation of the World Bank Group’s International Finance Corporation (IFC) support to Armenia.

Ines Rocha, IFC Division Director for Europe, spoke with Banks.am about IFC’s ongoing work in Armenia, the opportunities and challenges related to sustainable economic growth, and shared forecasts.

- What is the main mission and strategic focus of IFC’s support for private sector development in Armenia? 

- In terms of the key priorities for Armenia, earlier in January 2025, the World Bank Group presented to the Board Country Partnership Framework. This is basically a strategy. The new strategy really emphasizes the need for a stronger focus on building resilience to economic shocks and also natural risks and hazards.

It focuses on three key objectives - providing more and better jobs, a stronger human capital and also a more resilient economy. As part of these efforts, we expect to invest between $500 million to $700 million in Armenia for the next strategy period in areas such as infrastructure and real sectors, including through public-private partnerships, the development of sustainable infrastructure, like green energy, water, green transport, as well as easing access to financing for small and medium-sized enterprises, including through the banks with which we cooperate in Armenia.

- What programs has IFC implemented, or is currently implementing, to support private businesses in Armenia?

-  I’ve got here some very good figures. Since Armenia became a member country, IFC has invested close to $1.3 billion in Armenia, including mobilizing other investors. We led, for example, the financing and privatization of Vorotan Hydropower Cascade, and this cascade accounts for a significant share of the country’s electricity generation.

And more recently, in December 2024, we invested $200 million with Ameriabank to support on-lending for women-owned smaller businesses, sustainable projects, and MSMEs. And this project will be very critical to support job creation in Armenia.

We have also collaborated with ACBA Bank, Converse Bank, and Evocabank to support small businesses, agribusiness, and women entrepreneurs.

And I wanted also to highlight a very interesting deal with Team Telecom Armenia. We anchored a landmark $75 million sustainability-linked bond with the company with a $13.5 million participation. And this is an important one, because not only it’s going to support the rollout of 4G+, and fiber-to-home networks, but also it will extend the coverage to an additional 300,000 mobile data customers, connect 90,000 more homes to high-speed network by 2029. And because it is a sustainability-linked bond, it is a funding tool that supports the company’s adoption of sustainability goals. 

I must note that we had a record investment year in Armenia for IFC. Our fiscal year counts from July 2024 to June 2025. We are at about $355 million of investments. And this is compared, if I look at the previous figures, to actually no investments the year before in 2024, and in fiscal year 2023 only $15 million. So it’s a really big increase of what we have done over the last 12 months. 

- What are your forecasts for the growth of Armenia’s green and sustainable economy?

- The core message of our report is the following - in Armenia, there are a lot of opportunities for greener and faster growth, energy security and resilience, and we see two challenges.

One is dependency on imported gas - up to 63% of Armenia’s energy depends on imported gas. And obviously, gas being a fossil fuel also has an impact on health.

The second challenge that we see is exposure to natural disasters, water stress, floods, droughts, landslides. So, there is a water-stressed environment. With about $8 billion of investments in green solutions, you could make a significant contribution to a more sustainable Armenia. And the private sector can, according to us, contribute about 75% towards this effort.

So, where do we see the opportunities? The answer is - solar energy, which is a cleaner domestic source of energy, cutting away from gas dependency, and energy storage, because with solar and other solutions, you also need the storage. There are also opportunities in electrifying heating and transport in a sustainable way, where a lot of emissions come from, making critical infrastructures, such as schools and hospitals, more resilient to natural shocks and finally, strengthening agricultural resilience.  

- How can Armenia make itself more attractive for investments?

- There is a need to continue the path on key reforms to attract the private sector in  key areas like the energy sector or the financial sector. We are supporting this in collaboration with the public sector arm of the World Bank Group, which is the International Bank for Reconstruction and Development (IBRD). It is working very closely with the government of Armenia through a number of facilities that also imply reforms and technical assistance to improve certain areas. 

Armenia, by adopting a sustainable finance framework aligned with EU regulations, can really attract foreign direct investments and also scale up green financing. 

Another example is public-private partnerships, which Armenia has been using in some renewables, water, and transport. But there is also a need to increase the institutional capacity in planning and identifying projects that can be used for public-private partnerships to ensure a better project delivery.

Arpi Jilavyan