Azerbaijan, Baku, 13 February/ corr. Trend U. Ismayilova, I. Khailova/ The Ministry of Transport of Azerbaijan is satisfied with the initial proposal from the World Bank concerning a loan for the project of assistance of the railway transit worth $673,800,000, Musa Panahov, the Deputy Minister of Transport of Azerbaijan said.
The World Bank will grant the $450mln loan over 17 years with a grace period of four years on libor+0,05 interest rate. The remaining part of the loan will be paid off by the Azerbaijani Government.
The terms of the credit made by the bank are favourable from an economic point of view, he said. The funds will be spent on the renewal of hauling equipment, the energy supply system of the railway, the rail road, and the signaling and communication system as well, the deputy minister said.
The loan will be gradually paid off ($235mln) from the state budget and $215mln by the Azerbaijani Railway.
The project includes three stages. The first stage covers the renovation of the railway system, namely the section from Baku to the Georgian border.
The second stage includes the purchase of 50 new trains and the third includes the modernization and estimation of the Railway on the demands of the market economy. The government is currently considering the issue of converting the railway into a joint stock company. The project will last four years.
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