Water is an essential resource for economic and social development, but in Armenia its sustainable management is a major challenge. This landlocked country, subject to arid summers, has to cope with a growing demand for water, particularly for its agriculture, which today employs an estimated quarter of the working population. Irrigated farming accounts for around 80% of total agricultural production.
In the fertile Ararat plain, the ageing irrigation systems, dating from the Soviet era, lead to major water losses and depend on energy-intensive pumping. Agence Française de Développement (AFD) is helping Armenia make the transition to more sustainable water management by supporting the construction of the Vedi reservoir, the largest water infrastructure built in the country since the Soviet era. This initiative is not limited to infrastructure: it is part of a wider strategy to modernise the entire agricultural sector through a programme to develop irrigated agriculture, financed by European Union funds under the name IADAAM (Irrigated Agriculture Development in Ararat and Armavir Marzes).
Water in Armenia: a multidimensional challenge
The water challenge in Armenia does not just concern agriculture. It is part of a wider context in which climate change, the legacy of Soviet infrastructure and geopolitical tensions are exacerbating the pressure on this vital resource.
Lake Sevan, the country’s main freshwater reserve, is being over-exploited, threatening its ecological balance and having long-term economic consequences. At the same time, obsolete infrastructures, based on energy-hungry pumping stations and ageing networks, are causing major water losses. According to the World Bank, irrigation efficiency[1] is only 25% (whereas a modern system can achieve 75-80%) and water productivity could be improved by more than 40% by rehabilitating and modernising existing infrastructure. This inefficiency places a considerable burden on public finances, with the state having to subsidise irrigation on a massive scale to support farmers.
The impact of global warming is exacerbating this pressure. Irregular rainfall, early snowmelt and rising temperatures are altering hydrological cycles, forcing farmers to adapt their practices quickly to ensure the sustainability of their farms.
Ensuring a stable and sustainable water supply is essential for food security and the resilience of rural communities. This helps to keep people rooted in their land, limiting rural desertification and curbing the rural exodus.
An integrated project: the Vedi reservoir and the agricultural support programme
With financing in the form of a 75 million euro loan from AFD, supplemented by a 15 million euro contribution from the Armenian government and a 10 million euro grant from the European Union to support irrigated agriculture, the Vedi reservoir is a concrete response to the water challenges. It will store up to 29 million cubic metres of water, thereby reducing dependence on direct withdrawals from Lake Sevan. The reservoir will ensure irrigation of the Ararat plain during the dry season, guaranteeing farmers’ harvests. A support programme for irrigated agriculture completes this project, accompanying the transition to more sustainable and efficient water management.
In the Ararat plain, where agriculture is still largely based on outdated irrigation systems, the work undertaken goes beyond the construction of the reservoir. New irrigation canals and pipes are being installed to limit water losses and guarantee more reliable access to farms. More modern techniques such as gravity-fed irrigation are being introduced to reduce dependence on electric pumps and cut costs for farmers. On the ground, teams are working with farmers to help them adopt more efficient farming practices: introducing new crops adapted to local conditions, advising on crop rotation and the rational use of water.
The programme also supports farmers in their investments. Thanks to specific funding schemes, they can acquire more efficient equipment and install more water-efficient irrigation systems, such as drip irrigation. The initiative also facilitates land consolidation and the development of cooperatives, enabling small producers to pool their efforts and better adapt to market changes.
One of the key aspects of the programme is adaptation to climate change. Faced with droughts, heavy rainfall and increasingly unpredictable weather, farmers are given support to adjust their practices and ensure the long-term survival of their crops. By stabilising access to water resources and encouraging crop diversification, this programme is helping to strengthen the resilience of Armenia’s agricultural sector.
This comprehensive approach is gradually transforming local agriculture, offering farmers the means to improve their yields and stabilise their income, while preserving water resources in the long term.
Conclusion: a comprehensive approach to sustainable agriculture
The Vedi reservoir, combined with the integrated approach of the support programme for irrigated agriculture, illustrates how modernising irrigation, preserving natural resources and improving living conditions for farmers can be compatible objectives. This dual approach guarantees secure access to water and promotes sustainable agriculture in the face of climatic and economic challenges.
[1] Irrigation efficiency reflects the effectiveness of the entire irrigation system in delivering water to crops, from the source to the root zone. It is the result of effective delivery and application in the field. Good irrigation efficiency at system level means minimum water wastage and better use of water.
By Fanny Delpey, Director of AFD’s South Caucasus office
A graduate of Sciences Po Toulouse (Economics and Finance Section) and holder of a DEA in International Economics from the University of Paris II – Panthéon-Assas, Fanny Delpey has been working in international development for over 15 years.
After starting her career in 2006 as a Civilian Technical Aid Volunteer in Saint-Pierre-et-Miquelon, she joined the headquarters of the French overseas departments’ issuing institutes as a junior economist in 2008. In 2011, she joined Proparco as a portfolio manager, before joining AFD in 2015 as a project team manager in structured finance. For eight years, she contributed to the financial structuring of non-sovereign projects in agribusiness, transport and energy, mainly in Africa and Asia.
In 2019, she became Deputy Director of AFD in Jerusalem, overseeing projects in energy, health, governance and civil society in the West Bank and Gaza. Since July 2023, she has been head of AFD’s South Caucasus agency.
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