To establish a rigorous economic baseline for environmental governance, the project delivered an extensive Ecosystem Extent and Condition Account using high-resolution remote sensing data and Spatial Ecosystem Allocation Modeling. This technical analysis revealed the critical state of Armenia’s biomes, noting that while forest cover stood at approximately 358,324 hectares in 2024, nearly 70% remains degraded or over-mature due to intensive informal fuelwood harvesting. The assessment calculated the Total Economic Value (TEV) of Armenia’s forest ecosystems at USD 10,927 per hectare, representing a national aggregate asset value of USD 3.915 billion in 2024. This valuation was driven primarily by global climate regulation via carbon stock assets – valued at USD 3.784 billion under voluntary carbon market benchmarks – complemented by vital regional provisioning and regulating flows, including USD 71.66 million in fuelwood energy dependency, USD 35.29 million in nature-based cultural recreation, and USD 14.26 million in mountainous watershed protection and erosion control. 

The project’s scope extended to a place-based evaluation of candidate areas within the Bern Convention’s Emerald Network, providing deep-dive ecosystem accounts and pilot management allocations for the Ijevan and Armash sites. The 49,499-hectare Ijevan site, a mosaic of complex forests and mountain rangelands managed by state forest enterprises and local communities, was valued at a TEV of USD 119.95 million, climbing to USD 295.63 million when stored carbon stocks were integrated. Conversely, the 5,903-hectare Armash site in the Araks River Valley, a critical avian lowland plain consisting of permanent water bodies, brackish marshes, and commercial fishponds, was determined to hold an ecosystem service value of USD 13.95 million. Long-term area expansion and habitat management targets developed for these locations project cumulative financing requirements through 2043 at USD 104.6 million for Ijevan and USD 19.5 million for Armash. 

Beyond baseline accounting, the assignment conducted a holistic public expenditure review and a financing gap analysis against Armenia’s international commitments, including its Nationally Determined Contributions (NDCs) and Land Degradation Neutrality (LDN) targets. The diagnostic evaluated the volatility of Official Development Assistance (ODA), which totaled USD 28.3 million for all natural resource sectors in 2023, against long-term national funding requirements. To achieve key targets, the report estimates that Armenia requires annual investments of USD 53 million for forest area expansion to reach an optimal 20.1% canopy cover by 2050, USD 7.7 million through 2030 for Ramsar wetland restoration, and USD 87.8 million combined for grassland rehabilitation and sustainable land management across 1.3 million hectares of pasture. 

To address this deficit, Environment Group and Unique Land Use GmbH formulated strategic, multi-instrument recommendations to capitalize on the country’s emerging green finance infrastructure, such as the Central Bank’s National Sustainable Finance Roadmap and the August 2025 draft Law on Climate. The final report delivers concrete operational guidelines to transition from conceptual designs to active market-based pilots, focusing heavily on watershed-based PES schemes, voluntary carbon project certification, and potential bilateral debt-for-climate swaps. These options are structured into a phased national roadmap that sequences short-term diagnostics and community-led protection, medium-term scaling through blended public and donor finance, and long-term performance-linked funding mechanisms to ensure lasting ecological and economic stability.