Securing water and agriculture in Armenia: the Vedi reservoir project

Construction of the Védi reservoir, February 2023.

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).

Ararat irrigated plain, spring 2022.

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.

Vedi reservoir and irrigation system construction project

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.

Visit to the VEDI reservoir with, from left to right: Sylvain Tesson (writer), Audrey Gourdien (AFD), Alain Boinet (Défis Humanitaires), Olivier Decottignies (French Ambassador to Armenia), Vincent Montagne (President of the Syndicat National de l’Edition France). Photo Antoine Agoudjian for Le Figaro Magazine.

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.

Védi reservoir dam – December 2024

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.

 

I invite you to read these interviews and articles published in the edition :

2023 figures for Official Development Assistance and humanitarian aid

An article by Cyprien Fabre.

The VEDI dam in Armenia was built in partnership with the Agence Française de Développement and with the support of the European Commission. It will irrigate 3 000 hectares of farmland in the Ararat plain. Photo AFD.

2023 is already a long way off, everything is moving so fast. Humanitarian actors live in an eternal present. It’s cold right now in Armenia or Ukraine, it’s scary tonight in Sudan too, and thirst won’t wait until tomorrow in Mayotte or elsewhere. Humanitarians don’t drive looking backwards, but the OECD does.

All the humanitarian responses around the world involve thousands of individual projects that need to be aggregated to get an idea of the overall amounts, to measure and compare. Once a contract has been signed, the amounts disbursed are recorded by each of the geographical or thematic offices, then put together by a ministry – Bercy for France – and sent to the OECD, which checks line by line that the projects correspond to the definition of Official Development Assistance (ODA), of which humanitarian assistance is an important part.

In mid-January this year, the OECD published the official Official Development Assistance figures for 2023. In 2023, this ODA amounted to USD 223.3 billion, continuing an upward trend that began in 2007. This increase can be explained in part by the 5.9% rise in humanitarian funding.

The largest donors

For ODA in general, and for humanitarian assistance in particular, the concentration remains as high as ever. Firstly, the United States (USD 64.7 billion in ODA, including USD 14.5 billion in humanitarian assistance). Humanitarian funding increased in volume and as a percentage of ODA under the first Trump administration, and it is difficult to predict what will happen from now on even in the short term. Much further behind is Germany (USD 37.9 billion in ODA, including USD 2.4 billion in humanitarian assistance), followed by the European institutions (USD 26.9 billion in ODA, including USD 3 billion in humanitarian assistance). In sixth place, after Japan and the United Kingdom, France was one of the ‘big donors’ in 2023 (USD 15 billion in ODA, but only USD 410 million in humanitarian assistance). A drop in one of the largest contributors has the potential to destabilise the entire humanitarian funding system, as this drop could not be compensated for by the sum of the medium-sized or smaller contributors, if only they were able and willing to do so. The budget announcements for 2024 and 2025, already discussed in previous editions of Humanitarian Challenges, show that this is where we are. The members of the Development Assistance Committee (DAC), which brings together the main contributors to ODA, still provide by far the largest share of the effort. Non-DAC donors, i.e. those who are not part of what are sometimes called “traditional donors”, are major contributors to humanitarian solidarity, but the systems in place do not allow for much predictability. In 2023, humanitarian funding from non-DAC donors will be driven by Turkey, which will remain above the USD 5 billion mark for the seventh consecutive year, followed by the United Arab Emirates, which will increase from USD 278 million in 2022 to USD 1 billion in 2023.

French ODA

French ODA is following the same overall trends as the other DAC countries. However, in addition to the overall drop in ODA in 2023, France is characterised by significantly lower humanitarian funding. The recent increase in humanitarian funding is an interesting development, but does not really change the “humanitarian effort”, as humanitarian funding will rise from 2% to 4% of French bilateral ODA between 2022 and 2023, still far behind the DAC average of around 15%. The two graphs below show the nature of France’s ODA and that of DAC countries. (The graphs are interactive here: FR Final 2023 statistics | Flourish)

Source : OECD, FR Final 2023 statistics | Flourish
Source : OECD, FR Final 2023 statistics | Flourish

Where does this aid go? In 2023, Ukraine was for the second consecutive year the largest recipient of ODA and other concessional financing, with USD 38.9 billion, an increase of 28.5% compared to 2022. Ukraine received almost five times more aid from DAC members than the second largest recipient, India. This also applies to humanitarian funding, which, taking all donors together, has increased by 23% in 2023, reaching USD 3.5 billion, the leading global recipient.

Other countries receive substantial humanitarian assistance. Ethiopia (USD 1.6 billion, +6%), Gaza (USD 1.7 billion, +122%), Somalia (USD 1.2 billion, +51%), DRC (USD 1.2 billion, +108%), Sudan (USD 865 million, +19%)

Other countries receive more modest amounts of humanitarian aid, with significant variations in response to the year’s events. Armenia received USD 5 million in 2022, but USD 35 million in 2023. Chad received USD 379 million in assistance, up 119% with the additional arrival of Sudanese refugees.

Don’t forget that 2023 was also marked by several natural disasters in already fragile contexts such as Libya, Syria and Papua New Guinea, Madagascar, Malawi and Tanzania, as well as Morocco and Turkey. In all these contexts, including those that generally receive little aid, humanitarian funding has been substantial.

The central Sahel has remained at similar levels of humanitarian funding, showing that the various coups d’état, while they have had a clear impact on bilateral development cooperation, have had less of an effect on the response to humanitarian needs.

With a 32% fall, Afghanistan remains at USD 1.4 billion, a level of humanitarian assistance that is still well above the 2020 level (USD 562 million). In Yemen, aid has fallen by 16% but remains high (USD 1.4 billion). Few other crisis contexts have seen a significant drop in humanitarian funding. Countries that used to receive little humanitarian aid have received less, with a notable downward trend in Iraq since 2016, and other countries with more established development trajectories (Sierra Leone, Liberia).

Who delivers this humanitarian aid? Financial structures are well established, built by and for actors who have developed mechanisms that enable them to mobilise funds quickly. In 2023, multilateral agencies mobilised half of all humanitarian funds, although the trend is downwards. These same agencies mobilised 60% of humanitarian funds in 2020. The proportion of humanitarian funding mobilised by NGOs remains more or less stable at 28% in 2023.

Since 2021, there has been a noticeable shift towards increasingly significant contributions to resilience projects marked as humanitarian, for example by the International Finance Corporation (IFC) in Afghanistan or Ukraine, on issues of forced displacement or food security. These channels, marked ‘other’ in the graph above, will reach 15% in 2023, compared with just 3% in 2020.

At a time when the classification of projects is not always clearly humanitarian in the “Dunantian” sense of the term, when the long-term and the short-term are intertwined, new players are appearing on the humanitarian finance scene. This trend is set to continue, taking into account the expected decline in traditional ODA and even the conceptual changes underway regarding the very nature of cooperation between countries. It’s best to be prepared.

 

Cyprien Fabre is head of the “crises and fragility” unit at the OECD. After several years of humanitarian missions with Solidarités, he joined ECHO, the European Commission’s humanitarian department, in 2003, and held several positions in crisis contexts. He joined the OECD in 2016 to analyze the engagement of DAC members in fragile or crisis countries. He has also written a series of “policy into action” and “Lives in crises” guides to help translate donors’ political and financial commitments into effective programming in crises. He is a graduate of Aix-Marseille Law School.

 

I invite you to read these interviews and articles published in the edition :