Date of talks between Azerbaijan and French bank to coordinate new loan conditions on road project determined
Azerbaijan, Baku, September 11 / Trend , I.Khalilova /
Negotiations with the French BNP Paribas Bank in connection with the change in the financing conditions for the projects on construction of highways in Azerbaijan (part of third highway - M3) from Mughanli to Yevlakh and Yevlakh-Zagatala-Georgian border (part of M-4) are expected to be held starting from September 14, a government source said on September 11.
[In response to the global crisis, the French banks have tightened their credit requirements and conditions.]
"Bank presented to the government of the country the updated credit conditions, and from September 14 we will start discussing them in connection with which Baku will host a meeting with representatives of BNP Paribas," said the government source.
In addition to changing financing conditions, BNP Paribas also suggested the Government of Azerbaijan to reduce funding from formerly approved $320 million to $270 million. In this case, the remaining part of financing will be covered by Azerbaijan government, a source close to the talks said.
Although the bank initially offered $400 million, of which $80 million was on commercial terms. Azerbaijani government refused from the commercial part of the loan.
The $320 million loan agreement on the implementation of these road projects between BNP Paribas and the Ministry of Transport of Azerbaijan was signed on June 13, 2008 in Baku. The French bank has provided the fund under the support of the Israeli insurance corporation ASHRA. Under the terms of the agreement, the loan is provided for a period of 14 years with a grace period of four years and the rate of libor +0.45 percent per annum. Construction is scheduled to be completed within four years.
This was the first loan agreement with BNP Paribas on the road project.
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