WB To Disburse Delayed Funds To Armenia

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WB To Disburse Delayed Funds To Armenia

(Reuters)--The World Bank agreed on December 21 to disburse the final $6 million portion of a $65 million structural adjustment loan after a six-month delay because of privatization problems.

 

The World Bank's resident representative Owaise Saadat announced negotiations for a new credit of up to $50 million were under way.

 

The Bank's board was likely to agree to the loan by the end of March if Armenia keeps on track with plans to privatize the state's electricity distribution grid, he said.

 

The funds will be released from the Bank's headquarters in Washington and transferred to Yerevan's central bank. The tranche is to be used for direct support to the 2000 budget, which is heavily in deficit.

 

The final installment was due to be paid in June but was put on ice because of delays in privatizing four electricity distribution companies - the key condition for the credit.

 

Saadat said President Robert Kocharian had now approved a privatization timetable and tenders had been issued to potential bidders. A specific law has also been passed in parliament and legal advisers appointed for the privatization.

 

``This made our management believe that the process was back on track,'' he said.

 

Saadat said the Bank had, however, agreed to a waiver from the original condition which required the winner of the privatization tender to have been announced before the disbursement.

 

The World Bank is the largest donor organization operating in Armenia and total bank lending has amounted to some $605 million since it first began operating in the country in 1993.