WB Approves Nearly Half a Billion оf Dollar for Three Projects in Azerbaijan
Azerbaijan, Baku, 29 March /corr. Trend I.Khalilova / The World Bank's Board of Executive Directors approved allocation of $476mln to finance three Azerbaijani projects - Azerbaijan- Rail Trade and Transport Facilitation Project, Corporate and Public Sector Accountability Project, Rural Investment Project.
The gross cost of the project totals $673.8mln, with $450mln allocated by the WB. The credit resources will be provided in line with the international Bank for Reconstruction and Development for a period of 17 years under four years of grace period and libor+0,05%. The objectives of the Rail Trade and Transport Facilitation Project are to improve railway services in Azerbaijan, as well as the competitiveness, financial sustainability, operating and cost efficiency, and capacity of Azerbaijan Railway (ADDY) in particular along the transport corridor toward Georgia.
There are four components to the project. The first component consists of the Rehabilitation of east - west main line component which includes track signaling and power supply rehabilitation along the east-west corridor. It will rehabilitate about 240 km of mainline track in poor condition. The investment will remove the most critical speed restrictions and allow ADDY to handle existing and potential traffic at up to 100 kph for passenger trains and 80 kph for freight trains without significant track delays on those 240 km. It will finance the conversion of the power supply on the east-west corridor to 25kV, including new power stations, catenary and the related upgrade in signaling equipment. The second component consists of the new mainline locomotives component which will finance about 50 new mainline electric locomotives to operate on the East-West corridor. The third component consists of the modernization component which will include support for the full implementation of International Financial Reporting Standards (IFRS) accounting provision of advisory services to ADDY to implement its modernization program and provision o f equipment to ADDY to improve its oil spill prevention and response capacity. Finally the fourth component consists of total cost without contingencies. The project implementation component will provide training and consultant services to the Project Implementation Unit (PIU) for procurement, financial management, financial audit, monitoring as well as equipment required for project implementation.
The second loan totaling $11mln will be provided on preferential terms for Corporate and Public Sector Accountability Project (CAPSAP) for a period of 35 years under ten years of grace period and libor+0,75%. The total cost of the project is $25mln. Other part of the project is envisaged to be financed at the expense of grants from Japanese fund of PHRD, SECO, European Union and Azerbaijan Government.
The objectives of the Corporate and Public Sector Accountability Project in Azerbaijan are to strengthen accountability and transparency in financial reporting for the public and corporate sectors in line with international best practices. There are four components to the project. The first component is the Corporate Sector Component. This component would support the corporate sector in implementing appropriate accounting standards; ensure the sustainability and transparency of these interventions through the establishment of appropriate legal and institutional frameworks; and strengthen the statutory audit function. The second component consists of Public Sector Accountability. This component aims to enhance public sector accountability through the implementation of the Government's public sector accounting reform strategy, being the strategy currently being drafted to implement that part of the 2004 accounting Law that requires budget organizations and off-budget state funds to prepare financial statements in accordance with National Accounting Standards for Budget Organizations (NASBOs) which in turn are based on International Public Sector Accounting Standards (IPSAS). The third component consists of strengthening accounting, auditing and financial management capacity. This component will build long-term capacity in accounting, auditing and financial management. It will include the creation of an Azerbaijan Center for Professional Accounting, Auditing Training Education and Research (ACPATER) which will be subordinate to the Ministry of Finance, and have broad responsibility for strengthening Azerbaijan accounting, auditing and financial management capacity, including the implementation of this component. Finally the fourth component consists of project management.
As additional financing for Rural Investment Project in Azerbaijan, the bank provided preferential credit totaling $15mln. Some $5mln will be allocated by the Government. Due to these funds, the coverage zone of the project will be increased by 21 more regions. The project already covered 21 regions.
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