Program Highlights

Over the 5 year period (September 2006-September 2011) the Millennium Challenge Account - Armenia (MCA-Armenia) program expects to benefit more than 420,000 rural residents in around 350 communities across Armenia by refurbishing major sections of the country's main canal systems, modernizing some of the most urgently needed pumping stations, introducing new gravity irrigation schemes, re-building tertiary canals and restoring sections of the Ararat Valley Drainage system. The MCA-Armenia program is also training nearly 45,000 farmers in improved farming practices, delivering technical assistance to water supply institutions and providing 8.5 million USD in credit to farmers and small agribusinesses in support of the program objectives. Millennium Challenge Corporation's investment of nearly USD 180 million in the irrigation and agricultural sectors of Armenia is critical to the development of the country's agriculture and overall economy and the livelihoods of farmers and agribusinesses.

MCA-Armenia Program Today

Irrigated Agriculture Project - Infrastructure Activity

- 6 main canals;
- 5 gravity systems;
- 17 pump stations;
- Ararat Valley Drainage system;
- Tertiary canals in about 100 communities.

 

Results and Achievements

- 20 km of lining completed in 6 main canals (out of total 40.2 l);
- 41 km of lining completed in 5 gravity canals (out of total 44.8);
- 231 irrigation structures rehabilitated in 6 main canals;
- 64.6 km of tertiary canals rehabilitated which 50.7 km earth canals and 13.4 km of flumes (out of total 113 kilometers);
- 47.8 km of main drainage canals cleaned (out of total 65).
- 26 pumps imported and ready to be installed (out of total 58).

Irrigated Agriculture Project - Water-to-Market Activity

 

Results and Achievements 

- More than 43,000 farmers trained in OFWM practices, of which 32,000 in HVA;
- 216 demonstration sites established in all the marzes of Armenia;
- 110 enterprises/farmer groups assisted;
- USD 8.5 million disbursed in loans to 840 borrowers.

 

Institutional Strengthening Sub-Activity

- needs assessments and helping to develop Management Improvement Plans;
- office furniture and computer equipment (including software) and mobile water measurement and management devices, machinery;
- Trainings based on different content modules alongside with educational trips to observe firsthand experience and practices.

 

Results and Achievements

- Needs assessed in 44 WUAs and 3 WSAs;
- Consultations provided and management improvement plans developed for 44 WUAs;
- Office furniture and software (including Geographic Information Systems) provided to 44 WUAs and WSAs.

 

Historical Overview

 

On March 27, 2006 the Millennium Challenge Corporation signed a five-year, $235.65 million Compact with the Government of Armenia. The Compact is focused on one goal: reduction of rural poverty through a sustainable increase in the economic performance of the agricultural sector. Armenia planned to achieve this goal through a five-year program of strategic investments in rural roads, irrigation infrastructure and technical and financial assistance to improve the supply of water and to support farmers and agribusinesses. The Program will have a direct impact on approximately 750,000 people, or 75% of the rural population, and was expected to reduce the rural poverty rate and boost annual incomes.
On September 29, 2006 the Compact officially entered into force.

 

Later, in June 2009, the MCC board made a decision to suspend of the MCA-Armenia components - Rural road rehabilitation Project, with a $67 million budget to rehabilitate up to 350 kilometers of rural roads.

 

The Irrigated Agriculture Project was re-scoped in 2008, since the Armenian dram-to-US dollar rate increased, subsequently raising the civil works price and making it evident that the financial recourses allocated for the construction of irrigation infrastructure by the Compact would not cover all the expenses. As a result, a decision was made to develop a new program ensuring the most optimal choice of components and availing an ultimate input into the poverty reduction all over rural areas. 

 

Presently MCA-Armenia has one major project – Irrigated Agriculture project (USD 120 million) which includes Irrigation Infrastructure Rehabilitation component and farmers’ assisting Water-To-Market activity (USD 32 million) along with its Institutional Strengthening Sub-Activity (around USD 4 million). In accordance with the budget, around USD 23 million is allocated for administrative as well as monitoring and evaluation expenses.

 

The latest calculations reveal that the number of Irrigation Infrastructure and Water-To-Market activity beneficiaries is more than 427.000¹, which means that these people would directly or indirectly benefit from the program. All in all 358 communities and 44 Water Users Associations will also benefit from the program.

 

Millennium Challenge Corporation (MCC)

 

The Millennium Challenge Account (MCA) is an innovative foreign assistance program designed to "reduce poverty through sustainable economic growth" in some of the poorest countries in the world. On January 23, 2004, the Millennium Challenge Corporation (MCC) was established as an independent United States Government corporation to administer the MCA. The process of developing a proposal for MCA funding is intensive, rigorous, and likely to take months of cooperative, hard work. The following summarizes MCC expectations and requirements during Compact development and implementation.

Poverty Reduction through Economic Growth: MCC supports programs that focus specifically on reducing poverty by making investments that stimulate sustainable economic growth. MCC believes a country's development is sustainable only if aid is eventually replaced with economic activity and investment led by the private sector. MCC's role is meant to be transformational and transitional as assistance is replaced by private capital flows.

Reward Good Policy: MCC countries are selected to participate based on their performance in governing justly, investing in their citizens, and encouraging economic freedom. MCC believes good policies promote an environment for sustainable economic growth and poverty reduction, and thus for MCC investment.

Partnership and Country Ownership: MCC countries are asked to demonstrate leadership and a high level commitment through full ownership of the MCC Compact process. Working closely with MCC, MCA countries are responsible for identifying the greatest barriers to their own development, ensuring civil society participation, and developing an MCA program.
Focus on Results: MCA assistance goes to those countries that have developed well-designed programs with clear objectives, benchmarks to measure progress, procedures to ensure fiscal accountability for the use of MCA assistance, and a plan for effective monitoring and objective evaluation of results. Programs are designed to enable sustainable progress even after the funding under the MCA Compact has ended.

---