EBRD Refuses Considering Loan for Azerbaijani Railways
Azerbaijan, Baku, 7 May /corr. Trend S.Aliyev, A.Badalova / The European Bank for Reconstruction and Development (EBRD) ceased considering approval of a $50mln loan for the State Railway Department of Azerbaijan (SRDA) to establish a facility to serve locomotives in Bilajar and Boyuk Shora Depots and purchase spare parts for locomotives, Lin O'Grady, Senior Banker of the EBRD Transport Team, said on 7 May.
The EBRD Board of Directors had fixed 28 April as a date of considering approval of the credit for the SRDA. However, the Board of Directors did not consider the project.
"The project did not get to the stage of approval by the EBRD Board of Directors," the representative of the bank reported to Trend . "We could not agree the project with ADDY and the government of Azerbaijan," the Banker said.
The status of this project was listed as 'inactive' on the official site of the EBRD.
The project was designed to increase the security and efficiency of the railway operations of the SRDA and decrease the risk oil spill during transportation of oil and oil products which make up nearly 75% of the general traffic. The expenses on preparation of the project were covered by the British Trust Fund in amount of € 49,950.
However, postponing the approval of the loan does not mean the end of the EBRD co-operation with the SRDA. The European Investment Bank, in co-operation with the EBRD, intends to participate in the State Program for Development of Azerbaijani Railway in 2008-2011 which is estimated at AZN 1.252 bln. The Program is expected to be approved this year. These financial institutions suggested $500mln to Azerbaijan for realization of the project.
The program envisages acquiring 50 locomotives (currently technical consultant is being selected). The first stage will necessitate AZN 759.
A section of the Baku-Boyuk Kasik railway line ( 240 km) to Georgia ( 503 km) will also be completely reconstructed as the first stage of the project. Reconstruction of the railway will increase the speed of the trains from its present 80 km per hour to 100 km per hour.
Implementation of the program also envisages the sale of the company's stocks. The program also envisages the reconstruction of the locomotive and carriage fleets of the railway; improvement of the power economy, signals and communication systems; reconstruction of railway economy and the reconstruction of other infrastructures. According to the conditions of the EIB the loans are being provided with libor+0.5% and EBRD - libor+1%.
The correspondent can be contacted at: [email protected]