Russia grants Armenia $200mn loan to purchase armament

By bne IntelliNews February 22, 2016

Russia will give Armenia a ten-year $200mn loan to purchase Russian Smerch multiple rocket launcher systems, Igla missiles, bomb throwers, sniper rifles, armoured vehicles and other ammunitions, according to Interfax.

Armenia is a member of the Russia-led defence organisation Collective Security Treaty Organisation (CSTO) and depends on Russia for armament and military personnel to defend its borders against neighbouring Azerbaijan, with which it has been in a state of frozen conflict since 1994 over the breakaway region of Nagorno-Karabakh. Furthermore, Armenia borders Nato member country Turkey, and is therefore instrumental to the Kremlin to maintain a buffer zone against the security organisation.

It is unclear whether this loan is new or a reaffirmation of an older pledge made by Russia to lend Armenia $200mn. In July 2015, Russia reportedly offered to lend Armenia $200mn to modernise its military equipment and personnel, but the Russian military equipment was reportedly never received.

At an early February press conference in Yerevan, Deputy Finance Minister Pavel Safaryan reportedly told journalists that Yerevan was having trouble obtaining loans from Russia, but Defence Minister Seyran Ohanyan later issued a statement saying that the agreement with Russia was still standing.

The economic crisis in Russia might mean that it could be too strapped for cash to honour some of its previous financial commitments to its allies.

Related Articles

Armenia, Azerbaijan and Georgia enjoying Persian new year influx of Iranians

Armenia, Azerbaijan and Georgia are enjoying a welcome injection of revenues from the annual influx of Iranians enjoying their long Nowruz Persian new year holiday. Anecdotal evidence indicates ... more

Iran could join Moscow-led EEU by May says Russian minister

Russia’s Energy Minister Aleksander Novak has said Iran could join the Eurasian Economic Union (EEU) by May, RT reported on March 10. Tehran has repeatedly lobbied Moscow over the past year to ... more

Armenian energy minister says renewables, nuclear power to replace Russian gas

The Armenian government will continue with its efforts to reduce the share of Russian gas in the country's electricity mix, Energy Minister Ashot Maukyan said on January 31, according to the local ... more