Azerbaijan, Baku, Jan.11 / Trend , I.Khalilova /
Asian Development Bank prepares for resuming talks with Azerbaijani government on financing measures to improve country's railway infrastructure, the ADB Baku office said today. The visit of the Bank's transport mission headed by Hong Vang to Azerbaijan is planned from Jan.25 to 27.
"Bank's consultants have completed study on improvement of railway infrastructure within technical assistance. The project is expected to be selected in the second stage," the office said. The technical assistance was provided by bank in amount of $1 million.
The consultations with the government are expected for clarification of possibilities of Asian Bank's participation in financing railway projects. In case of consent, Bank's consultants will begin to develop the project.
"The bank is ready to allocate $550 million depending on country's needs for projects financing within Multitranche Financing Facility," the office said.
ADB has already held preliminary discussions with the Azerbaijani government on the possibilities of allocating half a billion dollars under the Multitranche Financing Facility (MFF), which envisages the concentration of several projects in one package.
Asian Bank has introduced this mechanism for financing road projects. About $500 million were allocated for road projects and $600 million for improving water supply and sewerage.
The total cost of the state program for the development of railways, which has not been approved yet, is estimated at 1.252 billion manat.
ADB has expressed willingness to soften the financing conditions for non-preferential loans from libor +0,6 percent to libor +0,2 percent in its preliminary proposal for the first time. Credit resources on the new conditions are offered especially for the railway project. They may be provided for 25 years with grace period of eight years. Besides interests on the loan Asian Development Bank offers to lower fees for service (from 0.35 percent to 0.25 percent).
At present, the government considers investors for the reconstruction of railways in the direction of the Russian border - Baku - Iranian border (north-south transport corridor). European Bank for Reconstruction and Development (EBRD) is also ready to join to the financing of these operations. This EBRD offered joint participation with the European Investment Bank (EIB) and the willingness to provide totally $500 million. German Development Bank KfW is ready to finance the renewal of rolling-stock of Azerbaijan State Railways, and Japan Bank for International Cooperation - electronization of railway. Currently, Czech Eximbank which offers to allocate 215 million euros for the development of railway economy and improvement of infrastructure in the Baku-Boyuk-Kesik area, also joined to talks.
Railway segment of the west-east corridor is financed by the World Bank, which has already allocated $450 million.