Armenia Compact

Smart Aid Delivered Efficiently in Armenia: Margarita's Story

Read about how the $150 million Irrigated Agriculture Project in MCC's Armenia compact helped farmers like Margarita better plan her growing season and guarantee more predictable irrigated water.

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Effective Donor Coordination in Armenia Ensures Sustainability

Partnering on irrigation canals, sharing studies for road construction, training on food safety and hygiene techniques are just a few examples of the value MCC finds in partnering with other donors.

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New technology brings opportunities for rural poor in Armenia

Robert Karapetyan tried the new laser leveling system

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In 2006, the U.S. Government’s Millennium Challenge Corporation (MCC) and the Government of Armenia signed a compact designed to reduce rural poverty through a sustainable increase in the economic performance of the agricultural sector. The Government of Armenia, in consultation with local civil society groups and MCC, identified improvements in the agricultural sector as critical to increasing food security and economic growth in the country. The compact program includes one of Armenia’s largest ever irrigation infrastructure refurbishments, accompanied by strategic assistance to the nation’s farmers, agribusinesses and water supply institutions, as well as investments in rural road construction and maintenance.

The Armenia Compact was restructured due to escalating global construction costs and currency fluctuations in October 2008. In addition, following the June 2009 meeting of the MCC Board of Directors, MCC did not resume funding for any further road construction and rehabilitation under the compact due to concerns about the status of democratic governance in Armenia. This effectively reduced the original $235 million compact to approximately $177 million. About 25 kilometers of pilot roads were completed prior to this decision. To date, 150 kilometers of MCC-funded road designs are now being funded by the World Bank.

  • Signed:
    March 27, 2006
  • Entry into Force:
    September 29, 2006
  • Completed:
    September 29, 2011

Financial data as of March 1, 2012.

The project aims to increase the productivity of farm households through improved water supply, higher yields, higher-value crops, and a more competitive agricultural sector through an infrastructure and a water-to-market activity.

  • Rehabilitate and construct infrastructure, including, main canals, gravity schemes, pumping stations,
    drainage systems and tertiary canals;
  • Build management capacity of local and national water supply entities;
  • Provide technical and rural credit assistance to farmers;
  • Expand the total area under irrigation production;
  • Improve overall efficiency of sourcing and delivery of water to farmers;
  • Help to ensure sustainable management of improved irrigation infrastructure.

The project aims to rehabilitate a large portion of Armenia’s Lifeline road network of rural roads. When complete, the Lifeline road network will ensure that every rural community has road access to markets, services, and the main road network. Under the Compact, the Government of Armenia will be required to commit additional resources for maintenance of the road network.

  • Upgrade and rehabilitate roads;
  • Audit ongoing roads maintenance;
  • Plan for future road maintenance strategically;
  • Ensure that rural communities have improved access to markets, social services, and to main road network.
  • May 5, 2004

    Armenia becomes eligible for receiving MCC compact

    MCC Board approves Armenia as a country eligible for an MCC compact.
  • December 15, 2005

    MCC approves proposed 5-year compact with Armenia

    MCC Board approves proposed 5-year compact with Armenia.
  • March 26, 2006

    Compact Signed

    The 5-year compact is signed in Washington between MCC CEO John Danilovich and the Government of Armenia Minister of Finance.
  • September 25, 2006

    Three key agreements signed; compact enters into force

    MCC and the Government of Armenia sign the Governance Agreement, Disbursement Agreement and Procurement Agreement; the compact enters into force on September 29, 2006, starting the 5-year implementation timeline.
  • December 11, 2006

    Initial disbursement

    First disbursement of MCC compact funding. MCA-Armenia holds a press conference at its office with participation of U.S. charge d'affaires Anthony Godfrey, MCC Resident Country Director Alex Russin and MCA-Armenia CEO Ara Hovsepyan.
  • January 7, 2007

    Implementing Entity Agreement signed with the Armenian National Statistical Service

    MCA-Armenia and the Republic of Armenia National Statistical Service (NSS) sign an Implementing Entity Agreement to use the National Statistical Service to assist MCA-Armenia with monitoring and evaluation of the compact program, in particular to measure the impact of the MCA-Armenia program on rural poverty.
  • January 14, 2007

    Implementing Entity Agreement signed with the Armenian Road Directorate

    MCA-Armenia and the Armenian Road Directorate (ARD) SNCO sign an Implementing Entity Agreement, in which MCA-Armenia will implement the Rural Roads Rehabilitation Project through ARD.
  • February 12, 2007

    Agreement signed with Water-to-Market consultant ACDI/VOCA

    MCA-Armenia and a consortium of companies, including ACDI\VOCA (USA), Euroconsult Mott MacDonald (Netherlands), and VISTAA (Armenia), sign a consulting services agreement, in which MCA-Armenia will implement the Irrigated Agriculture Water-to-Market activity through the consortium headed by ACDI/VOCA.
  • June 10, 2007

    MCC CEO visits Armenia

    MCC's CEO, Ambassador John Danilovich visits Armenia to inaugurate the MCA-Armenia offices. He visits one of the first demonstration farms established under the Water-to-Market activity and awards certificates to a group of farmers trained under the same component.
  • September 24, 2007

    First outreach presentation of the program

    MCA-Armenia starts a series of regional meetings with program beneficiaries by presenting program mission and investments in each marz (region).
  • October 16, 2007

    First construction contract signed

    MCA-Armenia signs two contracts with "Dorozhnik" LLC to rehabilitate 24.48 kilometers of the H17 Armavir-Isahakyan-Gyumri road.
  • November 10, 2007

    MCA-Armenia announces the start of the first construction project

    Prime Minister of Armenia Serzh Sargsyan and MCC Vice President Darius Mans participate in an official ceremony initiating construction of a 24.5 kilometer section of the H-17 Armavir-Isahakyan-Gyumri road.
  • April 8, 2008

    First contract is signed with financial organizations providing credits to program beneficiaries

    MCA-Armenia announces the award of contracts to four financial organizations to implement the Credit component of the WtM program, which will provide credits to beneficiaries living in rural areas to improve agricultural production and apply effective technologies.
  • May 29, 2008

    First agricultural loan disbursed

    Water-to-Market Credit component approves the first loan to be disbursed to a farmer for agricultural purposes.
  • December 16, 2008

    Agricultural Market Information System (ARMIS) is launched

    Funded by the Water-to-Market Activity, MCA-Armenia launches the first Armenian Market Information System, which disseminates information through its website and SMS. It enables farmers to negotiate with traders from a position of greater strength. The system is useful not only for the farmers but also for representatives of various industry sectors such as processors, wholesalers, retailers, hotels and restaurants, and all others who are interested in receiving accurate information and market dynamics.
  • February 15, 2009

    Construction supervision contract is signed

    MCA-Armenia signs a contract with a consortium of three companies for construction supervision of infrastructure rehabilitation works for: 6 main canals, 5 gravity systems, renovation and resizing of 17 pumping stations, rehabilitation of the Ararat Valley drainage system, and oversight of several tertiary canal rehabilitation projects.
  • June 8, 2009

    MCC places road project on operational hold

    The MCC Board decides not to resume funding for any further road construction and rehabilitation due to concerns about the status of democratic governance in Armenia. Approximately 25 km of pilot roads were completed prior to this decision. MCC-funded road designs for 150 km are eventually used by the World Bank to implement road rehabilitation.
  • September 16, 2009

    MCC approves Resettlement Action Plan Completion Report

    MCC approves the compact's first Resettlement Action Plan (RAP) Completion Report, which comprises and describes the RAP Implementation Process: negotiations, final agreements, agreements on land purchase and land use, and beneficiary surveys.
  • September 29, 2009

    Major contract is signed for rehabilitation of 17 pump stations

    MCA-Armenia signs a contract with a French consortium of three firms is to rehabilitate 17 pumping stations. These works represent the largest single contract under the Irrigation Infrastructure activity.
  • November 10, 2009

    Opening of first consolidation center under the Water-to-Market activity

    First Consolidation Center for storage and sale of farmers' produce is officially opened in Yerevan. The Consolidation Center provides freezing, cooling facilities, storage of agricultural produce, delivery to supermarkets, stores services and export facilities.
  • December 17, 2009

    Construction contracts are signed under the Infrastructure project

    MCA-Armenia signs two contracts to rehabilitate the Ararat Valley Drainage System and to rehabilitate tertiary irrigation canals. This event marks the completion of contract awards irrigation infrastructure to be rehabilitated under the Infrastructure activity.
  • March 29, 2010

    Water-to-Market qualitative process analysis results are published

    The findings of the first qualitative process analysis of MCA-Armenia's WtM activity are published. The qualitative analysis assessed program beneficiaries and stakeholders’ perceptions and interpretations of the activity.
  • April 21, 2010

    First tractors arrive to their borrowers

    A group of farmers take possession of seven tractors imported to Armenia by one of the ten credit providers as a leasing facility under the activity's Credit component. The event and a demonstration of the tractors are conducted on Henrik Yegyazaryan's plot, who is a Farm Credit Armenia member and stockholder, and an MCA-Armenia demonstration farmer.
  • May 21, 2010

    Last election of the stakeholders' committee

    MCA-Armenia holds elections for the Stakeholders' Committee and Governing Council civil society members. The elections are the fifth and final to be organized by the program.
  • October 4, 2010

    Collection center opens

    The first of three collection centers was opened in Aknaghbyur community of Tavush marz.
  • November 22, 2010

    Participation in "ArmProdExpo-2010"

    MCA-Armenia participates in the annual "ArmProdExpo-2010," with a pavilion highlighting program achievements and results. Armenia President Serzh Sargsyan and U.S. Ambassador Marie L. Yovanovitch attend the expo and visit the MCA-Armenia pavilion.
  • February 1, 2011

    Presentation of irrigation QPA results

    An MCA-Armenia consultant presents results of the Qualitative Process Analysis of the Irrigation Infrastructure activity are presented at a public event to guests and program beneficiaries.
  • March 20, 2011

    Completion of artesian wells rehabilitation component

    MCA-Armenia holds a public event at Sis community of Ararat marz with a ribbon-cutting ceremony, which celebrated the completion of rehabilitation work on 50 artesian wells.
  • March 29, 2011

    Completion of farmer training component

    The Water-to-Market activity holds its last farmer training in Alapars community of Kotayk marz, and awards its last certificates to participating farmers.
  • April 6, 2011

    Completion of main canals and gravity systems component / President of Armenia opens Shenik gravity

    MCA-Armenia announces completion of two infrastructure components - rehabilitation of main canals and gravity systems. The President of Armenia hosts the opening of the Armavir region Shenik gravity system.
  • April 8, 2011

    Irrigation legislation submitted to the National Assembly

    The National Assembly of Armenia received documentation related to irrigation legislation amendments proposed by MCA-Armenia. These amendments are designed to improve the efficiency of the irrigation sector and improve operation and maintenance of MCC-financed irrigation assets.
  • April 14, 2011

    Completion of 6 main canals, 5 gravity canals and farmer trainings

    The Prime Minister of Armenia, the head of the MCA-Armenia Governing Council, and the U.S. Ambassador to Armenia mark the completion of three programmatic components, including rehabilitation works in six main canals, five gravity canals and farmer trainings under the Water-to-Market component.
  • May 4, 2011

    MCC CEO visits Armenia

    From May 3 to 5, MCC Chief Executive Officer Daniel Yohannes visit Armenia to review outcomes and results of the projects implemented, as well as to evaluate their effectiveness and further sustainability.
  • June 6, 2011

    Water-to-Market Signs Thousandth Credit Borrower

    The credit component signs its 1000th borrower. An event in Garni, in Kotayk marz, highlights the credit activity and the borrower.
  • July 31, 2011

    Opening of pumping stations and tertiary canals

    MCA-Armenia announces the ceremonial opening of a number of rehabilitated pumping stations and tertiary canals.
  • September 2, 2011

    Environmental and Social Assessment final workshop

    A workshop summarizes the Environmental and Social component activities during the five years of compact implementation.
  • September 26, 2011

    Stakeholders' Committee members' first elections

    MCA-Armenia holds elections for eleven vacant positions (out of 15) on the Stakeholders' Committee advisory body. Over 50 candidates participated, and 248 out of 262 registered organizations took part in the vote.
  • September 28, 2011

    Compact Ends

    The five-year compact between MCC and the Government of Armenia officially expires.
  • September 30, 2011

    Permanent Project Management Group established by Government of Armenia

    The Government of Armenia establishes a permanent Project Management Group within the Ministry of Finance's Foreign Financing Projects Management Center to manage MCA-Armenia assets and monitor post-compact sustainability of MCC investments.
  • October 3, 2011

    Closeout celebration ceremony in Yerevan

    Compact completion is celebrated by high-level Government officials, beneficiaries, U.S. Embassy personnel, and MCC's Vice President of Compact Operations.