The government of Armenia, at its Cabinet session Thursday, approved the unconfirmed loan framework agreement No. CAM 1029 with the French Development Agency (AFD).

This agreement was signed in December 2025.

The explanation for this decision states that the significant deterioration of water and irrigation infrastructure, the high level of water losses, as well as the increase in risks due to climate change are serious challenges for the effective management of water resources and the sustainable development of agriculture in Armenia.

The program offers a comprehensive and phased solution to these challenges.

It has a nationally implemented water infrastructure investment component, which will be co-funded by the World Bank's Water and Irrigation Services Enhancement (WISE) Project, which is co-funded by the World Bank.

The AFD funding consists of a multi-tranche loan of up to €100 million, in three tranches.

The EU is also providing a grant of €12.456 million to provide technical assistance.

And the 2026 state budget of Armenia under the aforesaid provides for 193.6 million drams, of which 161.3 million drams are a loan, and 32.3 million drams are co-funding from the Armenian government.