Date of Talks with WB to Finance Road Projects in Azerbaijan Pre-poned

Business Materials 21 February 2008 19:16 (UTC +04:00)

Azerbaijan, Baku, 21 February /corr. Trend I.Khalilova / The World Bank and Azerbaijan Government have decided to accelerate the talks on additional finances for the project on construction of the second highway and fixed the talks on 6 March, a source stated at Azerbaijan's Ministry of Transport on 21 February. Earlier, the talks had been fixed for 11-12 March.

The project envisages completing the construction works of the highways Alat-Masalli and Baku-Shemaha-Mugan, and construction of the second circular road from Sahil settlement to Z.Tagiyev settlement.

The project costs $515mln, with $300mln to be allocated by the WB and the other part by Azerbaijani government. Increasing Azerbaijan's share in the project up to 41.7% [formerly 10-15%], resulted from applying VAT (18%) to works and services carried out at the expense of international credits. These expenses will be covered through Government's participation share in the project.

The first WB credit, within this road project, totaled $200mln- which was allocated on terms of the International Bank for Reconstruction and Development (for a period of 20 years with a grace period of four years and libor+0.5% interest rate). The Government of Azerbaijan allocated $65mln for the first phase of the project.

The gross cost of the project totals $780mln. The project envisages expanding and changing the highway Alat-Masalli, repair of the Baku-Shemaha-Mugan highway and construction of a circular road from Sahil settlement to Z.Tagiyev settlement.