Armenian parliament approves treaty on Russian military loan worth $100 mn

On Dec 6, the Armenian National Assembly ratified unanimously a treaty on a Russian military loan worth $100 mn. The document was supported by 92 MPs.

The treaty was signed on Oct 24, 2017. It envisages supply of weapons under an already existing agreement of 2013.

“The agreement envisages that Russia will supply a government export loan of $100 mn to Armenia to finance supply of Russian weapons at internal Russian prices,” Defense Minister Deputy Artak Zakaryan said.

The loan will be spent for financing delivery of Russian defense production. The Armenian party will use the credit to finance up to 90% of every contract in US dollars. Preliminary payment will be no less than 10% of the contract; the Armenian side will pay it to Russian companies.

The loan will be given for 15 years at 3% annual rate. The loan principal repayment will start from May 15, 2023 and complete on May 15, 2037. Within first six years, Armenia will be repaying by $1.5 mn, after that the sum will grow to $3.6-3.8 mn. Armenia is supposed to use the credit money in 2018-2022. The loan treaty will become the basis for separate agreements between the Armenian Defense Ministry and Rosoboronexport regarding terms and algorithm of the supply.

In 2016, Russia has already given a military loan to Armenia worth $200 mn for 10 years with first payment to be paid before the beginning of 2018. Using this money, Armenia buys from Russia Smerch multiple launch systems and weapons to it, Igla-S man-portable air defense system and so on.

Besides, the Armenian parliament approved an agreement in accordance with which Germany within NATO channels will give 1.5 mn euros for utilization of about 140 discarded military vehicles.