The World Bank Board approved an International Development Association (IDA) credit of US$20 million for the Yerevan Water and Wastewater Project (YWWP). The credit will assist the Armenian Government in its efforts to improve Yerevan’s water and wastewater system by continuing and expanding accomplishments achieved under a previous IDA-financed Municipal Development Project (MDP).

The YWWP will help provide Yerevan with safe, continuous water supply while reducing environmental pollution. This is the third IDA-financed water and wastewater project in Armenia. The World Bank also financed the initial Municipal Development Project to support Yerevan’s Water and Sanitation Company (YWSC) and a more recent (FY04) Municipal Water and Wastewater Project for Armenia’s medium and small-sized cities.

“Because of Government’s visionary leadership of the Armenian water sector, and diligent efforts by all project participants, significant improvements have been made in Yerevan’s water service since the first project began in 1998,” said Brian Steven Smith, head of the World Bank team designing the YWWP, – “Much work still remains of course, and we look forward to continued improvement during implementation of the new project.”

The Project benefits directly from Yerevan’s successful experience with a management contractor recruited under the MDP. For the YWWP, Government will increase private sector involvement and competitively recruit an operator for YWSC under a lease contract. The Project will finance investments in YWSC during the first five years of the lease.

The Project has two components: a YWWP Fund and Technical Assistance. The YWWP Fund will finance investments undertaken by the water utility operator during implementation, which will yield energy savings, improved reliability of supply, and reduction of environmental pollution. The Technical Assistance component will fund interim operational management of YWSC, project financial and technical audits, and incremental operating expenses.

The Credit will be made to Armenia on standard IDA terms, including 40 years maturity and a 10-year grace period.