Date of Official Talks with ADB on Second Road Project Fixed within MMF Package for Azerbaijan

Business Materials 9 August 2008 10:50 (UTC +04:00)

Azerbaijan, Baku, 8 August / corr. Trend I.Khalilova / Next week the Asian Development Bank (ADB) and Azerbaijani Government will hold official talks on the second tranche within the framework of Multitranche Financing Facility (MFF) for road projects, which was adopted in amount of $500mln in September 2007, Bank's Baku Office said on 8 August. This agreement was reached within the framework of discussions with the ADB's transport mission, which is on visit to Baku.

Within the framework of the second tranche, the ADB intends to finance price rise of the project on reconstruction of sections of west-eastern Yevlakh-Ganja and Gazakh-Georgian border highway. Particularly, nearly $50-60mln may be additionally allocated for the construction of the Ganja circular road. The final amount of the loan will be specified during the talks.

According to the Government, approval of this loan is not envisaged at the Board of Directors. Loan may be allocated on the basis of signing agreement by the vice-president of the bank.

The total cost of the first Yevlakh-Ganja section, which is 88.8km in length, amounts to $58.7mln. The Islamic Development Bank will finance $10.4mln of this amount, the Saudi Development Fund - $11mln, ADB - $24mln and Azerbaijani Government - $13.3mln. The construction of the second section of Gazakh-Georgian border highway, which is 38.8km, amounts to $30mln, and the ADB will finance $28mln of this amount and Azerbaijani Government - $2mln.

Doong So Pyo, ADB's new curator on transport projects in Azerbaijan, is in Baku to hold talks on additional financing of the road project.

A total of $200mln will be allocated from the MMF package to reconstruct Masalli-Astara road. Development of the whole MMF package is envisaged by 2014.

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