Azerbaijan, Baku, 20 February /corr. Trend I.Khalilova / The Asian Development Bank expects consent of Azerbaijan Government to connect it to the list of financial institutions, whose funds will be involved to finance the measures on improvement of the railway infrastructure. The banks have already appealed to the government with a proposal to allocate $550mln, ADB Baku Office reported.
These funds may be allocated within Multitranche Financing Facility (MFF) mechanism, which envisages conception of several projects in one project. For the first time, the ADB has applied this mechanism with regards to road projects with $500mln [currently one project totaling $200mln has been approved].
The Government believes that the ADB will suggest railway projects in the whole amount. The project may be implemented within the framework of the five year state program, so as to improve the railway infrastructure of Azerbaijan with the total sum of AZN 1.252bln.
The Asian Bank of Development (ABD) is prepared to soften the conditions of financing non-concession loans to the finance infrastructural projects in Azerbaijan- with libor+0.6% to libor+0.2%. The credits may be allocated for over a twenty-five year term, with the privilege eight year term. In addition, the ADB suggests decreasing the commissions for service (from 0.35% to 0.25%).
The Government considers that the ADB funds may be suggested for the realization of the second stage of improvement of the railway infrastructure.
Azerbaijan has been cooperating with the ABD, since 1999. The ABD approved credits for Azerbaijan under state guarantee of $604mln, taking into account $500mln within the framework of the Multitranche financing, to reconstruct highways.
Besides non-concession financing, ABD will also allocate privilege credits for over 32 years, including eight privilege years with an interest rate of 1% within one year and 1.5% for the amortization period.