The Netherlands is contributing €10 million to the Global Concessional Financing Facility for Armenia
Through the Global Concessional Financing Facility (GCFF) the Netherlands supports middle-income countries that receive large numbers of refugees but are not usually eligible for concessional financing from development banks. One such country is Armenia, which has taken in over 100,000 refugees since September.
As a result of military actions in Nagorno-Karabakh in September 2023, more than 100,000 people fled their homes, nearly all of whom found refuge in Armenia. Those refugees represent about 3% of the Armenian population.
The sudden population increase has put a great deal of pressure on the country’s social services, labour market and overall economy. Taking in so many people also entails considerable costs. To help Armenia in this regard, the Netherlands is contributing €10 million to the Global Concessional Financing Facility.
Lower interest rates and longer repayment periods
The Global Concessional Financing Facility was established in 2016 to support countries taking in large numbers of refugees. It offers middle-income countries the opportunity to borrow from multilateral development banks, such as the World Bank and the European Bank for Reconstruction and Development, on concessional terms. For example, at lower interest rates and with longer repayment periods. Middle-income countries usually do not have access to this type of concessional financing from multilateral development banks, which tends to be reserved for the poorest nations.
The Global Concessional Financing Facility is hosted by the World Bank and uses contributions from Supporting Countries, such as the Netherlands, Canada and Denmark. Such contributions enable countries to borrow more for development projects in this area.
Education, healthcare and shelter
Since its establishment, the GCFF has provided loans for development projects in Colombia, Costa Rica, Ecuador, Jordan, Lebanon, Moldova and, in the near future, will be funding projects in Armenia. Armenia plans to use this funding to strengthen education and healthcare, and to provide shelter and safety to those who need it.
Shelter and safety in the region
The Netherlands is a major Supporting Country of the Global Concessional Financing Facility and, as of this week, is also co-chair of the GCFF. For the Netherlands it is important that people fleeing their homes are treated humanely and provided with shelter and safety in the region. In contrast to long-term stays in refugee camps, this allows them the opportunity to rebuild their lives until they are able to return to their homes. This also limits the likelihood that refugees will feel compelled to flee to destinations farther away, such as in Europe.