Asian Development Bank Prepared to Cover Rise in Cost of Road Project in Azerbaijan within East-West Corridor at its own Expense

Business Materials 2 February 2008 13:08 (UTC +04:00)

Azerbaijan, Baku, 2 February/ Trend corr. I.Khalilova / The Asian Development Bank (ADB) is prepared to finance the rise in cost of re-construction of Yevlakh-Ganja and Kazakh-border of Georgia road projects in the amount of $500mln at the expense of multi transch package. Additional e$50 or 60mln may be allocated for this purpose.

Rise in cost of the project is connected with the project has been developed since 2005, but the construction material costs have increased which lead to additional expenditures.

Total cost of the first plot of Evlakh-Ganja with 88.8km length makes up $58.7mln. The remaining part will be financed at the expense of the Islamic Development Bank ($10.4mln), Saudi Development Fund ($11mln) and Government of Azerbaijan ($19.8mln).

ADB credit consists of two parts, reconstruction of roads and financing of border service components. ABD allocates $49mln on the first component and $3mln on the second component for 32 years with 8 privilege years on 1% within the privilege years and 1.5% - remaining period.

The project envisages upgrade of roads with 127km length. The project covers six regions with 700,000 population and 37% of which made up poor. About 87,000 internally displaced persons live in the territory.

The country roads will be restored, as well as reforms will be carried out in transport sphere of the country and entrance and exit system simplified as a result of implementation of the project. The project will cause opening of new jobs and better access to education, health and other spheres. Furthermore, implementation of the project will increase the competitiveness in Azerbaijan as a transit country in the region.