Azerbaijan, Baku, May 27 / Trend , I.Khalilova/
The Asian Development Bank (ADB) has completed discussions with the Azerbaijani government to provide multi-tranche financing (MFF) of up to $600 million to restore water and sanitation in Azerbaijan, the banks' Baku office said. In this regard, the Bank mission arrived in Baku.
"The ADB Board of Directors is expected to approve the first stage of MFF in September," the representation said.
The representation refused to divulge the amount of financing due to finishing the project, for which the first tranche of MFF will be allocated.
These funds would be intended to cover the additional costs in connection with price rise of the project to improve water supply and sanitation services in Agdash, Goychay and Nakhchivan. [Previously, the project was planned to cover the price rise only by increasing the equity participation of the Azerbaijani government in the project.]
The second tranche is designed to increase the coverage area of the same project for three more cities - Agjabadi, Beylagan and Balakan.
The third tranche is provided to create a centralized system of water supply and sanitation around Baku.
"There are various options for the cost of updating the infrastructure, so it is being clarified at the moment," the representation said.
The current design of the first project [to improve water supply and sanitation services in Agdash, Goychay and Nakchivan] was prepared in 2004, and during this period, the prices of construction materials significantly increased, especially increase is observed on the part of sewage. Rise in the cost of the project, without regard to the expansion of the project, estimated to be around $5-6 million, but the cost in view of the present scale of prices will be higher. Application of modern facilities in a sewage system in areas, covered by the project, which was proposed by Azerbaijan, also affects its value. In addition, the ADB project provides complete restoration of water supply and sanitation in selected areas.
The initial cost of the project is $39.9 million. To finance the project, Asian Development Bank has provided $30 million credit, and $9.9 million falls to the government.
Consultant of Joint Stock Company Azersu on water project is a consortium AICO Consulting Ltd / European Consultans Organization. The consultant has developed a report detailing the work provided for three years.
During the project, it is planned to conduct structural changes to develop water infrastructure in Agdash, Goychay, Nakchivan, Agjabedi, Beylagane and Balakanah by 2010.