The ADB Board of Directors today approved a multitranche financing facility for a Sustainable Urban Development Investment Program in Armenia. This is ADB's first investment in urban transport in Armenia. The first tranche of about $50 million is earmarked for the construction of a 5.3kilometer ring road in the capital, Yerevan, which will divert traffic from the center and support increased economic development in outer areas.

'These investments will stimulate economic activity in urban areas, generate jobs and improve mobility,' said Juan Miranda, Director General at ADB's Central and West Asia Department (CWRD).

The 12 cities benefiting from the program are the main engines of growth in the country. Together, they account for almost 90% of the nation's gross domestic product, with Yerevan alone accounting for 60%. However, unbalanced regional development, ageing and inadequate public transport services, and a rising number of traffic accidents have harmed the environment and undermined the economic potential of the country's rapidly expanding urban centers.

The program will help the government deal with pressing urban problems such as poor air quality, noise, traffic congestion and losses linked to long travel times. The program will finance in particular urban infrastructure missing links as well as metro improvement and multimodal interchange hubs. ADB's backing for the government's sector development plan will also encourage private sector interest.

'The financing facility will support more efficient, reliable and safer urban transport services, a cleaner urban environment and increased economic opportunities that will have a direct and indirect poverty impact on people across the country,' added Arnaud Dauphin, Urban Development Specialist at the Urban Development and Water Division of CWRD.

The Ministry of Economy is the executing agency for the program and the Municipality of Yerevan will be implementing all the projects in the capital city. The program will comprise five tranches and is due for completion by December 2020.