The German KfW bank has provided a total €20m to the Central Bank of Armenia (CBA) under the Sustainable Housing Finance Market program.

The 10-year credit has been issued with a 3-year grace period. The German Government will subsidize part of the interest rates.

The Armenian banks will receive the funds at an annual interest rate of 8.25%, but the rates can be revised in line with market developments.

The program was launched in 2005, after the Armenian and German Government reached an agreement. Under the program Armenia received two €6m tranches, in 2006 and in 2007, as well as a €1.5m grant for consulting.

The KfW bank has been assisting Armenia in implementing financial cooperation programs since 1995. It opened its branch office in Armenia in October 1998.

The bank’s focused its activities on the energy sector, water supply and drainage, as well as on the financial and banking system and private sector.

In 2009-2010, the bank is to provide a total of €110m under the Armenian-German financial cooperation programs.

T.P.