The RA Government Decrees

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2

The RA Government Decrees on the Investment Program on the The RA Government Decrees on the Investment Program on the The RA Government Decrees on the Investment Program on the The RA Government Decrees on the Investment Program on the

Construction and Development of the Yerevan Greenhouse Zone in the Construction and Development of the Yerevan Greenhouse Zone in the Construction and Development of the Yerevan Greenhouse Zone in the Construction and Development of the Yerevan Greenhouse Zone in the

Vicinity of Noragavit district Vicinity of Noragavit district Vicinity of Noragavit district Vicinity of Noragavit district

2012

2012

Երևանի ջերմատնային գոտու ծրագրի ներդրումների կատարման աջակցման մեխանիզմները

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of the Yerevan Greenhouse Zone in the Vicinity of Noragavit districtof the Yerevan Greenhouse Zone in the Vicinity of Noragavit districtof the Yerevan Greenhouse Zone in the Vicinity of Noragavit districtof the Yerevan Greenhouse Zone in the Vicinity of Noragavit district

DRAFT

EXCERPT

FROM THE P R O T O C O L

OF THE RA GOVERNMENT SESSION

17-18

ON THE APPROVAL OF THE INVESTMENT PROGRAM ON GREENHOUSE CONSTRUCTION

AND DEVELOPMENT IN THE VICINITY OF NORAGAVIT DISTRICT OF YEREVAN

To approve the Investment Program on the Construction and Development of Greenhouses

in the Vicinity of Noragavit District of Yerevan submitted by the Armenian Harvest Promotion

Centre CJSC in accordance with the Annex.

3 May, 2012

RA Prime Minister

Tigran Sargyan


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Annex

the RA Government Decree

№ 17 of May 3, 2012

INVESTMENT PROGRAM ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN INVESTMENT PROGRAM ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN INVESTMENT PROGRAM ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN INVESTMENT PROGRAM ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN

THE VICINITY OF NORAGAVIT DISTRICT OF YEREVANTHE VICINITY OF NORAGAVIT DISTRICT OF YEREVANTHE VICINITY OF NORAGAVIT DISTRICT OF YEREVANTHE VICINITY OF NORAGAVIT DISTRICT OF YEREVAN

� PrefacePrefacePrefacePreface

Over the past 5 years, the average annual volume of vegetable crop production in Armenia

has made up 800 000 tons, which is approximately 250kg per capita. This is quite a good figure.

Nevertheless, crop production in Armenia is highly seasonal in nature, as a result of which, during

different seasons drastic price changes are recorded in the market, and export volumes cover a

meagre per cent of the gross production.

The development and expansion of state-of-the-art greenhouses is an effective measure for

mitigating the seasonal fluctuations of crop production in Armenia, increasing the competitiveness

both in domestic and foreign markets, as well as for reducing the import volumes of crop

production in the country.

The existing greenhouses in Armenia were constructed decades ago and considerably fall

behind the modern ones in technology and productivity. Except for the greenhouses constructed

during the last 1-2 years (approx. 3 ha), the productivity of the rest of existing greenhouses

fluctuates between 15 and 20 kg per square metre, while the modern ones are able to provide 45-

100kg product per square meter depending on the technological solutions applied. At present, the

Armenian producers are still unable to produce the appropriate amount, and varieties of vegetable,

as well as to meet the rhythmicity requirements of the major foreign markets.


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The investment program on greenhouse construction and development in the vicinity of

Noragavit district of Yerevan has been developed for the purpose of developing and enhancing

state-of-the-art greenhouses.

Within three years the program assumes constructing approximately 50ha greenhouse zone

with engineering and logistic facilities in the vicinity of Noragavit district of Yerevan in

accordance with the most modern technology requirements. The aforementioned selection of the

zone is conditioned by the availability of ground area and opportunity to use the Yerevan TPP

resources for centralized heat supply.

The Greenhouses Development Program complies with the RA Government’s economic

development strategy and objectives, in particular, with the creation of competitive economy,

attracting investments, raising the level of food security and poverty reduction.

In terms of job creation, the effective use of lands, as well as ensuring additional local

budget receipts from property and land tax, the program is of social and ecological significance

also.

The program is developed in accordance with the climate data in the vicinity of Noragavit

district of Yerevan and the study and analysis on communal infrastructure and the Yerevan TPP

resources. While developing the program, the comparative advantages of Armenia, such as the

number of sunny days, the length of daylight, the availability of agricultural lands and water

resources, as well as rather competitive tariffs of electric energy and gas have been taken into

consideration.

Through introducing the most modern technologies for greenhouse construction, the

implementation of the program will enable the large and small enterprises to combine year-round

crop production and ensure the sufficient amount of products for export. This will give the

opportunity to improve the productivity of crop production, ensure the availability of the

products in the domestic market and the comparative stability of prices. On top of that, the


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further greenhouse development will significantly mitigate the existing agricultural risks

associated with weather changes.

� Program DescriptionProgram DescriptionProgram DescriptionProgram Description

The Armenian Harvest Promotion Centre CJSC (hereinafter referred to as Program

Manager) is authorized to manage the implementation of the investment program on Greenhouse

Construction and Development in the Vicinity of Noragavit District of Yerevan. For the project

implementation, the Program Manager will organize the investors’ selection, conclusion of

contracts with the investors and contract management processes, the construction of the

centralized system infrastructure for thermal and electric energy, water, gas supply and water

discharge, as well as will provide the investors with land plots with their points to connect to the

infrastructures and will bear the responsibility for the program implementation.

Under the investment program it is assumed to construct glass greenhouses with their

supporting operation and- maintenance facilities /cold storage, processing, sorting, packaging

facilities, etc./in the land area adjacent to Noragavit District of Yerevan, which will meet the

modern technology requirements.

State-of-the-art greenhouses are at least 4 m high glass or polycarbonate steel frame

structures with their heating, screening, blacking out, assimilation lighting (or without this), drip

irrigation, modern automatic electric and computer climate control systems, as well as with their

operation and maintenance supporting (cool storage, sorting, packaging, etc.) facilities for

hydroponic and soil-based crop production.

Under the investment program, during three years 50 ha of greenhouses will be

constructed in the 70ha of land area adjacent to the Yerevan TPP.


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On the assumption of the international experience in the area of greenhouse construction,

the minimal economically optimal size of the greenhouses is 4 ha together with the area for

maintenance and supporting facility. In case of availability of the required amount of

investments, the construction of two greenhouses with one maintenance and supporting facility in

10-12 ha land plot is more efficient. It will give the opportunity to cut back on the required

investment volumes, reduce the product cost price and to raise its competitiveness.

Taking into account the aforementioned preconditions, the positions of the existing

greenhouses maintenance facilities as well as those to be constructed, we anticipate dividing the

land area into 9 separate land plots each with 5-11 ha of land plots. The investors will have the

opportunity to obtain one or more land plots.

Planning the layout of the greenhouse is carried out in a way which will allow secluding

plots from the main greenhouse area in order to construct a greenhouse for specialized bulb

production in case if the need arises. Moreover, open field agricultural farms can also use the bulbs

to be produced in the greenhouses.

The Program Manager will conduct the investor selection process for the program

implementation, the main preconditions for which will be the timing for greenhouse construction

and plot price payment, as well as the number of obtained land plots. The respective land plots

will be alienated to the selected investors through direct sales.

Taking into consideration that the construction of greenhouses of the estimated dimensions

requires milliards drams of investment, the provision of favorable conditions for local and foreign

investors such as alienation of land plots to the investors through installment sale, providing them

with centralized system infrastructures for thermal and electric energy, water, gas supply and

water discharge, can be the key to the program success.

Investors will have the opportunity to obtain the land areas through installment sale for a

term of one year.


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After terminating the pledge of the land area(s) obtained under the present program and

after land leveling for the greenhouses construction by the investor, in order to attract financial

resources needed for the implementation of the program, (taking into account the opportunity to

use the centralized system of the infrastructures) it would be expedient to provide an investor up

to 80 % government guarantee of the land area(s)’s market value.

We are also planning to construct a centralized system of thermal and electric energy,

water, gas supply and drainage infrastructure for the greenhouses. We are planning to use the

Yerevan TPP resources for the greenhouses heating. The investors will be able to connect to the

infrastructures of the centralized system directly from the special points of their land plots.

The availability of the centralized system of the main infrastructures will enable the

investors to avoid rather sophisticated, time and resource consuming solutions for electric power,

water and gas supply, as well as for water discharge. As to the heat supply, the construction of the

main supply infrastructure for the greenhouse zone will allow the investors to compensate the

most part of the thermal energy generation cost. Meanwhile, the use of the TPP's thermal energy

will promote the stability of the TPP's product consumption, on the one hand, and the investors

will benefit from more affordable supply, on the other. Consequently, the product cost price will

decrease; and the level of profitability and the product competitiveness will increase. The

aforementioned factors will positively influence on the price of the investments’ payback period

also.

The estimated investment volume of the program will be about 35-40 billion Armenian

drams, and the annual gross product of the greenhouses to be constructed will make at least 30

000-40 000 tons.

Approximately 1500-2000 new workplaces will be created for the whole value chain,

ranging from the production to realization of the product; only 800-1000 of the employees will be

employed at the greenhouses (15-20 workplaces per 1 ha of greenhouse).


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Based on the practical results of the constructed greenhouses and on the availability of the

required resources, we’ll discuss the feasibility and expediency to construct 65 more ha of

greenhouses in the area of approximately 86 ha in the above mentioned zone for the second phase

of the program.

� The Main Program Implementation ArrangementsThe Main Program Implementation ArrangementsThe Main Program Implementation ArrangementsThe Main Program Implementation Arrangements

We anticipate implementing the program during three years. The investment program

timeline is entitled to change based on the investors selection deadline. During the mentioned

period approximately 50ha of greenhouses with their supporting operation and maintenance

facilities will be constructed and operated in accordance with the modern technology solutions.

The following arrangements will be implemented under the program:

1. The Yerevan Municipality will ensure that the actual land users vacate 156 ha land area in

the vicinity of Noragavit district of Yerevan;

2. Organisation of the investors’ selection process for the program implementation by the

Program Manager. Preference will be given to the investors who

a) will obtain more land plots,

b) will offer the shortest payment deadlines for the right to use the centralized system

infrastructures for thermal and electric energy, water, gas supply and water discharge,

as well as for land alienation,

c) will offer the shortest payment deadlines for the construction of state-of-the-art

greenhouses in compliance with the investment program requirements;

3. Alienation of separate land plots to the selected investors through direct installment sale,

based on the cadastral value. The land sections which are overloaded with water mains, are

not entitled to be alienated to investors and for these section free perpetual easement will

be applied in order that the investors could purposefully use the obtained land plots;


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4. Imposing liability for a breach of payment in installment and construction prescribed in

the contract on the direct sale of the land plot;

5. Land site leveling, greenhouses construction on minimum 75% of the land (at least 1ha in

the first year) with their operation and maintenance facilities by the investors;

6. Obtaining permission to construct roads and the centralized system infrastructures for the

greenhouses thermal and electric energy, gas, water supply and water discharge;

preparation of the design-calculation documents package for the infrastructures

construction by the Program Manager;

7. Construction of the roads and centralized system infrastructures for thermal and electric

energy, water and gas supply to the greenhouses , water discharge, as well as providing the

investors with land plots with their points to connect to the infrastructures by the Program

Manager;

8. Imposing liability on the Program Manager in case of default on ensuring the

construction of the centralized system infrastructures for thermal and electric energy,

water and gas supply to the greenhouses, water discharge, as well as providing the investors

with their land plots with the points to connect to the infrastructures;

9. Providing the Program Manager with free perpetual easement over the land area

overloaded with the infrastractures for the maintenace of the infrastracuteres ensuring

electric energy, gas, and water supply, as well as water discharge.

10. Managing the execution of the contract terms concluded with the investors.

11. Managing the mainenance of the centralized system infrastructure for thermal and

electric energy, water and gas supply, as well as water discharge by the Program Manager.

Estimated energy requirements for the greenhouses:

Electric capacity: 30 MW/h

Thermal energy consumption: 89 Gcal/h

Gas consumption: 16000 m³/h.


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� Anticipated Program OutcomesAnticipated Program OutcomesAnticipated Program OutcomesAnticipated Program Outcomes

1. Attracting large-scale investments in the Armenian agriculture sector (the overall

investment volume under the program will constitute 35-40 billion AMD);

2. Proper use of land areas in the vicinity of Noragavit district of Yerevan;

3. Development of state-of-the-art greenhouses and import of the most modern technologies

and know-hows in Armenia;

4. Promotion of the development of crop production and realization value chain,

Expansion of the Armenian crop production and export volumes, (the annual gross product

of the greenhouses to be constructed will make 30 000-40 000 tons), as well as improvement of

productivity and quality;

5. Mitigation of the seasonal price changes of crop products in the domestic market;

6. Considerably decrease in import volumes along with the increase in crop production

volumes;

7. Creation of new jobs;

8. Ensuring additional community budget receipts from the cost of the land to be alienated

and, later on, from property and land tax;

9. Setting preconditions for the development of similar zones in the other regions of the

Republic.


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GOVERNMENT OF THE REPUBLIC OF ARMENIAGOVERNMENT OF THE REPUBLIC OF ARMENIAGOVERNMENT OF THE REPUBLIC OF ARMENIAGOVERNMENT OF THE REPUBLIC OF ARMENIA

DECISIONDECISIONDECISIONDECISION

3 May 2012, № 633 - N

ON THE INVESTMENT PROGRAMON THE INVESTMENT PROGRAMON THE INVESTMENT PROGRAMON THE INVESTMENT PROGRAM

ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF

NORAGAVIT DISTRICT OF YEREVAN AND ON HOLDING THE RA DECREE OF NORAGAVIT DISTRICT OF YEREVAN AND ON HOLDING THE RA DECREE OF NORAGAVIT DISTRICT OF YEREVAN AND ON HOLDING THE RA DECREE OF NORAGAVIT DISTRICT OF YEREVAN AND ON HOLDING THE RA DECREE OF N1516N1516N1516N1516----A OF A OF A OF A OF

OCTOBER 27, 2011 OCTOBER 27, 2011 OCTOBER 27, 2011 OCTOBER 27, 2011 TO BE INVALIDTO BE INVALIDTO BE INVALIDTO BE INVALID

Based on the Clause 5 of Part 1 of Article 66 of the RA Land Code and on the Investment

Program on Greenhouse Construction and Development in the vicinity of Noragavit District of

Yerevan submited by the Armenian Harvest Promotion Centre CJSC, the Government of the

Republic of Armenia decides:

1. to approve the proposal on alienating separate lots (hereinafter referred to as Lot)

from 69.83 ha plot of land in the vicinity of Noragavit district of Yerevan owned by the

Yerevan community through direct sale in compliance with the conditions established by

the present decree, in a manner consistent with Annex N 1 in order to construct state-of-

the-art greenhouses;

2. to establish that:

1) the “Armenian Harvest Promotion Centre” Closed Joint Stock Company (hereinafter

referred to as “Program Management Company”) will be responsible for the Invetsment Program

on the construction and development of greenhouses in the vicinity of Noragavit district of

Yerevan (hereinafter referred to as “ Program”);


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2) the separate land parcels specified by Section 1 of this Decree will be sold to the

investors selected by the Program Management Company for the purpose of implementing the

entire Investment Program under the terms established by this Decree;

3) during the implementation of the Program the sizes and numbers of the separate land

parcels specified by Section 1 of this Decree may change in the a result of the negotiations with

investors.

Meanwhile, investors may be selected by the Program Management Company by 1

December, 2014. The Program Management Company will prefer the investors who will acquire

a larger number of land parcels and will propose shorter timeframes for the payment of the

amounts and the construction of greenhouses with modern technologies;

4) the parts of the land parcel specified by Section 1 of this Decree which are loaded with

water mains or are foreseen for the development of infrastructure for the centralised system or for

roads for common use will not be for sale;

5) in the event investors are not selected for no less than 40 per cent of the separated land

parcels specified by Section 1 of this Decree by 1 December, 2012 the Program will be deemed as

not established and this Decree shall be repealed; and

6) the restrictions established by the Decree N 498 of the Government of the Republic of

Armenia dated 11 May 2002 for the contruction of production buildings and facilities on

agricultural land shall not extend to the separated land parcels specified by Section 1 of this

Decree which are to be sold to the investors selected under the Invetsment Program.

3. Recommend that the Mayor of Yerevan ensures, in accordance with the established

procedure, the implementation of the change of the purpose of the land specified by Section 1 of

this Decree.

4. Establish the main terms and conditions for the transactions under the Investment

Program, pursuant to Annext 2.

5. Assign the Minister of Territorial Admnistration, the Minister of Energy and Natural

Resources and the Minister of Urban Development of the Republic of Armenia, as well as


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recommend the Mayor of Yerevan and the Public Services Regulatory Commission of the

Republic of Armenia to assist with the implementatin of the Program within their powers.

6. The Chairperson of the State Water Committee under the Ministry of Territorial

Admnistration of the Republic of Armenia to discuss with the Water Users Union/Association and

the Program Management Company and ensure the disassebling and transportation of the water

mains on the land area specified by Section 1 of this Decree.

7. Repeal Decree N 1516-A of the Government of the Republic of Armenia dated 27

October 2011 “On Participating in the Pilot Project Based on the Public-Private Partnership for

the Development of the Greenhouses Sector in the Republic of Armenia“.

8. This Decree shall take effect on the day following the official promulgation.

Tigran Sargyan


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Annex N 1


№ 633 – N of May 3, 2012

Chief of Staff of the Government

of the Republic of Armenia D.Sargsyan


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Annex N 2


№ 633 - N of May 3, 2012

TRANSACTIONS TO BETRANSACTIONS TO BETRANSACTIONS TO BETRANSACTIONS TO BE MADE UNDER THE INVESTMENT PROGRAM MADE UNDER THE INVESTMENT PROGRAM MADE UNDER THE INVESTMENT PROGRAM MADE UNDER THE INVESTMENT PROGRAM

ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF ON GREENHOUSE CONSTRUCTION AND DEVELOPMENT IN THE VICINITY OF

NORAGAVIT DISTRICT OF YEREVANNORAGAVIT DISTRICT OF YEREVANNORAGAVIT DISTRICT OF YEREVANNORAGAVIT DISTRICT OF YEREVAN

Transaction 1. Contract to be concluded between Yerevan community and the ProgramTransaction 1. Contract to be concluded between Yerevan community and the ProgramTransaction 1. Contract to be concluded between Yerevan community and the ProgramTransaction 1. Contract to be concluded between Yerevan community and the Program

Management Company Management Company Management Company Management Company

Party - 1 Yerevan Community

Party - 2 Program Management Company

Liabilities of the parties

The Yerevan community is obliged:

1. to carry out proper changes in the lands in the prescribed

manner;

2. to make a decree on the allienation of appropriate land areas

to investors through direct installment sale for a term of one year

and in compliance with the master plan suggested by the

program management company within 10-day period after

receiving information from the program management company

on the selection of each investor;

In order to properly use the land areas, the land sections

which are overloaded with water mains and centralized system

infrastructures, shall be given to the investors in compliance

with free perpetual easement. These sections shall not be

entitled to alienation to investors;

4. after making the decree on the allienation of land area(s)


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to each investor within 5 days to conclude a contract with the

investor on direct sale of the respective land area(s) on the

condition of installment payment;

5. to provide the investors with land areas free of the actual

possession and the rights of third parties in accordance with the

contracts on direct allienation of lands;

6. within its jurisdiction to grant all the permits required for

building the greenhouses in the manner prescribed by the RA

legislation;

7. to provide the program management company with lands free

of the actual possession and rights of third parties for thermal

and electric energy, water and gas supply, as well as water

discharge infrastructures;

8. within its jurisdiction to grant all the permits required for

thermal and electric energy, water and gas supply, as well as

water discharge and road building infrastructures in the manner

prescribed by the RA legislation;

9. To provide the program management company with free

perpetual easement in respect of the land areas needed for


water discharge, road building and maintenance infrastructures.

The program management company is obliged:

1. To carry out the investors selection process, and, after

selecting investors for at least 40% of the total land area to be

alienated under the program, to inform Yerevan community on

the selection of each investor within five days.

2. to develop and justify the sample forms of contracts on the


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rights to use the infrastructures to be concluded between the

program management company and investors, as well as

contracts on direct sale of land areas to be concluded between

the Yerevan community and investors with Yerevan community.

3. to organise the process of signing contracts between Yerevan

community and investors on direct sale of land areas;

4. to conclude a contract with the investor on the right to use


water discharge infrastructures while signing contracts between

Yerevan community and each investor on direct sale of land

areas;

5. to build the road, thermal and electric energy, water and gas

supply, as well as water discharge infrastructures within seven

months after the moment of concluding contracts with investors.

The infrastructures shall be the ownership of the Party-2, and

the Party-2 shall ensure their operation and the needed

capacities. Based on the deadline for receiving the permits for

building the infrastructures, the deadline mentioned in the

present Chause may be postponed, but no longer than the

deadline for the permit envisaged by legal acts;

6. to organise the process of concluding respective contracts with

investors on supplying thermal and electric energy, water and

gas;

7. Exercises supervision over the execution of the contractual

obligations included in the contracts signed with the investors,

and let Yerevan community know in case if there are violations;

8.to submit quarterly reports to Yerevan community on the

implementation of the investment program, after signing


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contracts between Yerevan community and investors on direct

sale of land areas;

Responsibility of the Parties The Parities, pursuant to the legislation of the Republic of

Armenia, shall bear responsibility for non-fulfillment or

improper fulfillment of the contractual obligations.

Transaction 2. ContractsTransaction 2. ContractsTransaction 2. ContractsTransaction 2. Contracts to to to to be concluded between the investors selectedbe concluded between the investors selectedbe concluded between the investors selectedbe concluded between the investors selected for the implementation of for the implementation of for the implementation of for the implementation of

the Investment Program on the Construction and Development of Greenhouses in the vicinity of the Investment Program on the Construction and Development of Greenhouses in the vicinity of the Investment Program on the Construction and Development of Greenhouses in the vicinity of the Investment Program on the Construction and Development of Greenhouses in the vicinity of

Yerevan Yerevan Yerevan Yerevan communitycommunitycommunitycommunity and Noragavit districtand Noragavit districtand Noragavit districtand Noragavit district

Seller Yerevan community

Buyer Investor selected for the implementation of the Invetsment

Program on the construction and development of greenhouses in

the vicinity of Noragavit district

Object Direct sale of land area/areas to the Buyer on the installment plan

for the construction of greenhouses with modern technologies

Timeframe for concluding

the Contract

With five days following the making of the decree of the Seller

to sell the land area/areas

The price and payment

terms of the Contract

The amount to be paid by the Buyer to the Seller constitutes

AMD 4,460 (four thousand four hundred and sixty) per square

meter . The price of the Contract includes the cadastral value of

the land – AMD 2,940 (two thousand and nine hundred forty)

and an additional amount of AMD 1,520 (one thousand five

hundred and twenty).

The amount specified in this section will be paid by the Buyer in

accordance with the schedule proposed by him/her during the

process of selection of investors, within one year of the

conclusion of the Contract, with the first installment payment


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(13 per cent) to be made no later than within 10 days after the

conclusion of the Contract, and the second installment payment

(9 per cent) to be made within 90 days following the expiration

of the term for the first installment payment, the third

installment payment (35 per cent) to be made within 120 days

following the expiration of the term for the second installment

payment, and the fourth installment payment (43 per cent) to be

made within 130 days following the expiration of the term for

the third installment payment.

Transfer of the title on land

by Contract

The title on land area/areas will be transfered to the Buyer upon

the state registration of the rights, however the land area/areas

will be deemed as mortgaged in Yerevan community before the

full payment by the Buyer of the Contract price and the payment

for the title esablished by the Contract between the Program

Administrator and the Buyer.

Costs for concluding the

Contract (provision of a

plan, address, notary

certification of the Contract,

etc.)

At the Buyer’s expense

The liabilities of the Parties The Seller is obliged to:

1. Provide the Buyer with a land area/areas free from the rights

and factual possession of third parties.

2. Establish a permanent free easement in respect of the

segments of the land area/areas which are loaded with water

mains and other infrastructure belonging to third parties, th euse

the sold land area/areas for their designated purpose.


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3. Within its powers and according to the procedure established

by the legislation of the Republic of Armenia, provide the Buyer

with all the permissions required for the construction of

greenhouses and supporting facilities for their operation and

maintenance.

The Buyer is obliged to:

1. Pay the Contract price pursuant to the terms and conditions of

the Contract.

2. At the time of conclusion of the Contract, conclude with the

Program Administrator a Contract on making available the right

to join the infrastructures providing supply of thermal energy,

electric energy, water and gas, and sewerage.

3. Carry out the construction of greenhouses in accordance with

the schedule proposed by him/her during the process of selection

of investors. Meanwile, develop no less than 75 per cent of the

land area/areas with greenhouses and supporting facilities for

their operation and maintenance (at least 1 ha during the first

year of development).

4. Use the land area/areas exclusively for the construction and

operation of greenhouses with modern technologies, glass-

covered or Polycarbonate-covered, heated greenhouses at least

4m high, in compliance with the terms and conditions under the

Investment Program on the construction and development of

greenhouses in the vicinity of Noragavit district, and supporting

facilities for their operation and maintenance (refrigeration,

sorting, packaging, etc.).

6. To use the greenhouses built on the land area at least for ten


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years exclusively for the production of plant products and/or

seedlings.

7. Create conditions for the implementation of surveillance by

the Program Management Company over the fullfilment of th

eterms of the Contract.

8. In the event of using assimilation lighting, provide the

developed greenhouses with a verticl and horizontal blackout

system, using it in the evening and night hours.

9. To sell the land area/areas acquired by it only with th

eagreemnet of the Seller before the complete performance of the

obligations taken on under the Contract. The land area/areas can

be sold to a new buyer only in th event the new buyer assumes

the obligations established by the Contract concluded with the

Buyer.

The responsibility of the

Parties

The Parities, pursuant to the legislation of the Republic of

Armenia, shall bear responsibility for violating the terms and

conditions of the Contract.

The Buyer shall be responsible for.

a) violating the timeframes of payment of the Contract price, in

which case a fine shall be calculated against the outstanding

amount due, from the maturity date through the date of

fulfillment of the obligation, twice of the RA Central Bank

Settlement rate of bank interest for the respective time periods.

In the event of delaying the regular payment timeframes for

more than 180 days, the Seller shall be entitled to dissolve the

Contract. The amounts paid by the Buyer before the moment of

dissolution of the agreement shall not be returned;


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b) violating the development timeframes, in which case a fine

shall be calculated against the Contract price per unit of the land

area not developed, from the maturity date through the date of

fulfillment of the obligation, twice of the RA Central Bank

Settlement rate of bank interest for the respective time periods.

In the event of delaying the development timeframes for more

than 180 days, the Seller shall be entitled to dissolve the Contract

for the land area not developed. The amounts paid by the Buyer

before the moment of dissolution of the agreement shall not be

returned.

Liabilty for violating other terms and conditions of the Contract

will be established by the Contract.

Transaction 3. Contracts to be Concluded Between the Program Management Company and the Transaction 3. Contracts to be Concluded Between the Program Management Company and the Transaction 3. Contracts to be Concluded Between the Program Management Company and the Transaction 3. Contracts to be Concluded Between the Program Management Company and the

Investors selected for the Implementation of the Investment ProgramInvestors selected for the Implementation of the Investment ProgramInvestors selected for the Implementation of the Investment ProgramInvestors selected for the Implementation of the Investment Program

Party – 1 Program Management Company

Party - 2 Investor selected for the implementation of the Invetsment Program

on the Construction and Development of Greenhouses in the vicinity

of Noragavit district of Yerevan (hereinafter referred to as Investor)

Subjec Enabling Party-1 and Party-2 to connect to thermal and electric

energy, water and gas supply, as well as water discharge

infrastructures.

Timeline for concluding

contracts

While concluding contracts on direct sale of land area(s) between

Yerevan Municipality and Party-2

Contract Price and

Timeframe

The price for the right to connect to the thermal and electric energy,

water and gas supply, as well as water discharge infrastructures per 1


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sq.m land area constitutes 2540 (two thousand five hundred forty)

Armenian Drams.

The contract price shall be paid by Party-2 during the process of

selecting investors in accordance with the timeframe suggested by

Party-2 within one year after concludong the contracts, but no later

than the first payment (in an amount equal to 45 %) within 10 days

after concluding the contract, the second payment (in an amount

equal to 45 %) withing 90 days after the deadline defined for the first

payment, the third payment (in an amount equal to 5%) within 120

days аfter the deadline defined for the second payment, and the forth

payment (in an amount equal to 5%) withing 130 days after the

deadline defined for the third payment.

Assignent of the rights to

use the infrastructures

under the contract

The right to connect to each of the thermal and electric energy, water

and gas supply, as well as water discharge infrastructures shall be

deemed assigned to Party-2 starting from the moment of connecting

to the respective infrastructures.

Liabilities of the parties Party-1 is obliged

1. to provide the land area(s) acquired from Party-2 with a point/

points to connect to thermal and electric energy, water and gas

supply, as well as water discharge infrastructures within seven

months after concluding a contract with investors. Based on the

deadline for obtaining the infrastructures’ building permits, the

timeframe defined in the present clause may be prolonged;

2. after building the thermal and electric energy, water and gas

supply, as well as water discharge infrastructures to conclude a

contract with Party-2 on using the infrastructues;

3. to provide Party-2 with the required capacites for the thermal and


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electric energy, water and gas supply, as well as water discharge

infrastructures;

4. to organise the process of concluding appropriate contracts on

supplying the investors with thermal and electric energy, water and

gas.

Party-2 is responsible

1. for paying the contract price in complicance with the terms and

conditions of the contract;

2. for concluding a contract with Party-1 on using the infrastructures

for an appropriate fee, after completing the building of the thermal

and electric energy, water and gas supply, as well as water discharge

infrastructures.

Responsibility of the Parties The Parities, pursuant to the legislation of the Republic of Armenia,

shall bear responsibility for violating the terms and conditions of the

Contract.

Party-1 shall be responsible for violating the timeframe for building

the thermal and electric energy, water and gas supply, as well as

water discharge infrastructures, in this case penalty shall be imposed

in respect of the contract price from the maturity date till the date of

fulfillment of the liability, twice of the RA Central Bank Settlement

rate of bank interest for the respective time periods.

Party-2 shall bear responsibility for violating payment deadlines, in

which case fine shall be imposed for the amount subject to payment

but still not paid from the maturity date till the date of fulfillment of

the liability, twice of the RA Central Bank Settlement rate of bank

interest for the respective time periods.

The Contract may be cancelled only in case of cancellation of the


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Contract concluded between Yerevan community and Party-2 on

direct sale of land area(s).

As to violation of other term and conditions of the Contract, liability

shall be imposed under the Contract.

Chief of Staff of the Government

of the Republic of Armenia D.Sargsyan


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Documents

The RA Government Decrees