Azerbaijan, Baku, Dec. 18 / Trend E.Ismayilov /
Today, the World Bank (WB) and the Azerbaijani government signed loan agreements worth $450 million on the project promoting rail transit and trade in Azerbaijan.
Head of the WB office in Baku Gregory Jedzejczak and Finance Minister Samir Sharifov and Transport Minister Ziya Mammadov on behalf of the Azerbaijani government signed the agreement.
The credit resources are allocated by the International Bank for Reconstruction and Development (IBRD) for a term of 23 years with a grace period of eight years at a cost - a six-month libor plus spread is changing. Commission on the loan, which will be paid by the borrower, was determined at the level of 0.25 percent. Payments on the loan will be made twice a year - 15 June and Dec.15.
The railway line along the Baku-Boyuk-Kesik section is planned to be reconstructed within the loan. The 300-kilometer railway section requires immediate repair and this will be completed in the first phase.
In general, the project envisages overhauling the 503-kilometer railway. The investments will be directed to a shift from direct to alternating current toward Baku-Boyuk-Kesik, and buying 50 new locomotives for operation on the alternating current. The WB office in Baku said the project envisages increasing the railway speed for passengers to 100 kilometers per hour and cargo to 80 kilometers per hour.
The project consists of three components. The first envisages rehabilitating the railway sector, namely the plot from Baku to the Georgian border, the transition from 3.3 kV DC to 25 kV AC, and replacing the signal system due to the transition to an electric power system.
The second component envisages the purchase of 50 electric locomotives and the third - aligning the railway department's activity with the requirements of a market economy. The government is already considering converting the company into a joint stock form. The project worth $673.8 million will run four years.
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