Azerbaijan, Baku, 23 April / corr Trend I.Khalilova / An agreement on allocation of $320mln for the project on reconstruction of the railway section from Muganli to Yevlakh (part of the Baku -Shemakha-Yevlakh) will be signed with French bank BNP Paribas, after the issue of authorization gets resolved. The relevance documents in this regard have already been submitted to the Azerbaijani President's Executive Apparat, the Azerbaijani Transport Ministry said on 23 April. Ziya Mammadov, the Transport Minister is authorized to sign the loan agreement and Samir Sharifov, the Azerbaijani Finance Minister is authorized to sign an agreement on provision of state guarantee.
The length of the section is 156km.
The bank stated its readiness to allocate a $400mln loan for each project. The loan for the first project is allocated under the guarantee of the Japanese Bank for International Cooperation (JBIC) and the Japanese insurance agency Nexy, the second project will be guaranteed by the Israeli insurance corporation ASHRA.
The Azerbaijani Finance Ministry and French bank BNP Paribas agreed upon the financing terms of the project to reconstruct a highway from Shamakhi to Zakatala and the bank is prepared to allocate $320mln at the warranty by Israeli insurance company ASHRA. In accordance with the agreement, the loan will be allotted at libor + 45% rate a year for the term of 14 years with a 4 year grace period.
Earlier the bank was prepared to allocate $400mln, including $80mln to be allotted on commercial terms. But during the talks, Azerbaijan refused from the commercial part of the French bank's loan and the rest part will be financed by the country's government.
The Azerbaijani Government and the French bank BNP Paribas concluded talks on projects to widen the highway from Hajigabul to the Georgian border from a two-lane to a four-lane highway and to finance the reconstruction of the highway from Shamakhi District to Zakatala District of Azerbaijan,
The length of the first section is 156km and the second section is 164km.
The bank is going to submit the last version of the loan agreement to the Finance Ministry.
The bank stated its keenness to present $400mln though the Japanese Bank for International Cooperation and the Japanese insurance agency Nexy. The loan is allocated for twenty years with a four-year grace period and LIBOR of +0.75% rates. The insurance services for the loan will be provided by ASHRA. Nexy is expected guarantee the loan under the rate of libor+0.75% for the term of 20 years with 4-5 year grace period. However, the loan was divided into two parts and the Finance Ministry intends to refuse from the commercial part of financing like in the first project, the Transport Ministry said.
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