Azerbaijan, Baku, Sept. 17 / Trend I.Khalilova /
The French BNP Paribas Bank postponed the negotiations with the Azerbaijani government on the new terms of loan agreement, signed last summer on 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), to Sept. 27-28, a government source said on Sept. 17. The visit of the bank's delegation was scheduled for Sept. 14.
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.
The project includes reconstruction of highways Muganli-Yevlakh (length: 156 km) with the estimated value of $250 million and Yevlakh-Zagatala-border with Georgia (length: 164 km), the cost of which is still to be defined. The cist of projects in Azerbaijan increased after the value added tax was imposed in 2008 on all import goods, services and work, implemented by international loan.
This was the first loan agreement with BNP Paribas on the road project.
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