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WB considers 2010 quotas on Azerbaijan's concessional financing

Business Materials 23 February 2010 10:53 (UTC +04:00)

Azerbaijan, Baku, Feb. 23 / Trend N.Ismayilova / 

The World Bank is considering financing two projects through International Development Association quotas for Azerbaijan in the 2010 fiscal year, the WB Baku Office reported.

The IDA retained $70 million in funding for Azerbaijan for the 2010 fiscal year.

"IDA funds can be fully utilized to finance the project building the Baku-Shamakhi-Mugan Highway, but the final decision is still pending," the office said. "Now the bank is also considering the possibility of partially using the concessional loan for the project on the deep withdrawal of sewage from the Hovsan Aeration Station in the Caspian Sea."

The bank will also allocate over $ 200 million for the construction of the Baku-Shamakhi-Mugan Highway [previously called for the construction of the two-lane road].

Negotiations on the project are expected to begin in mid-March, and approval by the Board of Directors will be made in April.

The length of Baku-Shamakhi-Mugan is 124 kilometers. Its construction is estimated to the amount of $90.11 million. Initially, construction operations are planned to be held to the amount of $72.09 owing to WB funds with $18.02 million from the Azerbaijani side.

The Italian company Todini Costruzioni Generali S.p.A is the general contractor of the project. The Finnish company Finroad is a project consultant.

The project includes the construction of the Tovuz Road with a length of 7.2 kilometers.

The road will link Baku with other regions of Azerbaijan.

Based on preliminary estimates, the cost of the environmental project is about $100-150 million. The project to rehabilitate and expand the Hovsan Wastewater Treatment Plant to reduce the dumping of untreated sewage into the Caspian Sea will require about $800 million-$1 billion.

Measures for wastewater treatment at Hovsan will be initiated at the expense of the French bank credit. The technology at the station is French and will clear wastewater before its release into the sea. The consultant of the project is the alliance of the French Seurega company and Azerbaijani ASPI company. The feasibility study for the project was prepared by the Turkish Seyas company. The project is expected to be approved in the 2010 fiscal year.

Azerbaijan became a WB member in 1992. During this period, the bank has approved the provision of loans worth $2.5 billion to finance 47 projects. Only in the 2008 fiscal year, the bank intended to finance 13 projects worth $1.251 billion, thus accomplishing the four-year budget strategy in two years. Over the next two years (2009-10 years), the WB has expressed readiness to allocate the country more than $1 billion on commercial terms from by the International Bank for Reconstruction and Development.

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