Azerbaijan, Baku, Feb. 4 / Trend I.Khalilova /
The Asian Development Bank (ADB) is expected to receive from the Azerbaijani government a definitive answer about the possibility of ADB's involvement in financing activities to improve the country's railway infrastructure within a month, the bank's Baku Office said. The bank received the news in January during the ADB transport mission's recent visit in Azerbaijan led by Hong Vang.
"During the month, the government plans to hold internal consultations and specify the position to attract ADB credit resources," the source reported. "If necessary, the government will inform the bank in this regard."
Given the current uncertainty, the Asian Bank froze its technical assistance after completing the first phase of the project during its studies to improve rail infrastructure. The second phase included the project's selection.
Technical assistance was provided to the bank in the amount of $1 million.
The bank was ready to allocate $550 million depending on the country's needs for financing projects within the Multitranche Financing Facility. Given that the bulk of the funding for the restoration of the country's railway infrastructure was hired by the World Bank, ADB no longer expects a query on a large loan.
The ADB has introduced a mechanism for financing road projects. About $500 million were allocated for road projects and $600 million for improving water supply and sewerage.
The total cost of the state program for the development of railways, which has not yet been approved, is estimated at 1.252 billion manat.
ADB has expressed a willingness to soften financing conditions for non-preferential loans from libor +0.6 percent to libor +0.2 percent in its preliminary proposal. Credit resources on the new conditions are offered especially for the railway project. They may be provided for 25 years with a grace period of eight years. In addition, the ADB offers to lower fees for services from 0.35 to 0.25 percent.
The government is also considering investors for the reconstruction of railways in the direction of the Russian border and Azerbaijani-Iranian border (north-south transport corridor).
The European Bank for Reconstruction and Development (EBRD) is ready to join the financing of these operations. This EBRD offered its joint participation with the European Investment Bank (EIB) and its willingness to provide $500 million. The German Development Bank KfW is ready to finance the renewal of Azerbaijan State Railways rolling-stock, and the Japan Bank for International Cooperation - the electronization of the railway. Currently, the Czech Eximbank, which offers to allocate 215 million euro for the development of the railway economy and the improvement of infrastructure in the Baku-Boyuk-Kesik area, also joined the talks.
The ailway rsegment of the west-east corridor is financed by the WB, which has already allocated $450 million.
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