Azerbaijan, Baku / corr Trend I.Khalilova / The Azerbaijan Government has preliminarily coordinated with the Asian Development Bank (ADB) a plan to purchase land along the Masalli-Astara section of the highway, for which the Bank is prepared to allocate $200mln, the Baku Office of the ADB said on 21 November.
Strengthening the process of purchasing land along this highway depends upon the signing of a loan agreement and in this respect the collection of visas is underway. Ziya Mammadov, the Azerbaijani Transport Minister, is expected to undersign the document on behalf of Azerbaijan.
The Government said that the land will be purchased at the expense of the budget funds and AZN 30-35mln will be allocated in this respect. The amount of the necessary funds will be defined after the adoption of the plan which should be intensified due to price hikes as well, the bank said. The construction work can commence mainly after the purchase of land.
"The development of the project, as well as the completion of measures to purchase land requires two years to complete. Thus, by the end of 2008 it will be possible to launch construction work in case the process is intensified," the Baku office of the bank said. The road has been divided into three parts and the first 23km section will be reconstructed by 2010-2011.
This year, the board of directors of the Asian development bank (ADB) intends to approve a multi-tranche package worth $500 mln under the new project - Multitranche Financing Facility (MFF) and a credit agreement on the project of reconstruction of sections of the Highway - Massali-Astara (a part of the existing project), with financing which will be carried out under the first tranche under MFF.
The ADB credit resources will be partially ($190mln) granted from the general resources of the bank (the period of the credit is twenty-four years with a four-year lax period, and under the interest rate of libor+1% per annum), and $20mln - lax (the period of the credit is thirty-two years with an eight-year lax period, and under the interest rate at 1% during the lax period, and 1.5% - during the remaining period). The lax part of the credit is considered for the reconstruction of rural roads linking the highways.