Azerbaijan, Baku, May 26 / Trend N.Ismayilova /
The World Bank (WB) Board of Directors approved the project to expand the Baku-Shamakhi-Mugan Highway from two to four lanes, the WB Baku Office reported.
The bank will allocate $241.6 (246mln projected earlier) million to finance the project in the form of mixed credits, of which $70 million will be funded by the WB's International Development Association (IDA), and $171.6 million by the International Bank for Reconstruction and Development (IBRD). The remaining funds account for the state's participation in the project. The total project cost excluding VAT is $302 million compared to the $296 million projected earlier.
Credit from IDA granted for a period of 17 years, with a possible suspension of its maturity for four years. Credit from the World Bank granted for a period of 20 years, with a possible suspension of its maturity for 10 years.
The Azerbaijani government and the World Bank held formal talks on a loan agreement in a third project to expand the Baku-Shamakhi-Mugan Highway April 5-9.
The length of Baku-Shamakhi-Mugan is 122 kilometers. A total of 101 kilometers will be built within the draft under discussion. The remaining road has already been built. The ministry reported that the work on the road's design along a 15-45-kilometer interval has already been completed. The ministry has already announced a tender on the project to define a contractor.
Construction costs were estimated at $90.11 million. Initially, construction work worth $72.09 million was planned at the expense of the WB, and $18.02 million at the expense of Azerbaijan.
Azerbaijan became a WB member in 1992. During this period, the bank has approved loans worth $2.5 billion to finance 47 projects. In the 2008 fiscal year alone, the bank intended to finance 13 projects worth $1.251 billion, thus accomplishing the four-year budget strategy in two years. Over the next two years (2009-10 years), the WB has expressed readiness to allocate more than $1 billion on commercial terms from the IBRD.
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