Azerbaijan, Baku, Aug. 11 / Trend E.Ismayilov /
The World Bank (WB) and the Azerbaijani Transport Ministry signed a new loan agreement on a project to expand the Baku-Shamakhi-Mugan Highway from two to four lanes Aug. 11, Trend correspondent reported from the signing ceremony.
Transport Minister Ziya Mammadov and WB Country Manager Joseph Owen signed the agreement. This is the first such agreement signed by Owen since his appointment in August 2010.
The bank will allocate $241.6 million to finance the project in the form of mixed credits - $70 million will be funded by the WB International Development Association (IDA), and $171.6 million will be provided by the International Bank for Reconstruction and Development (IBRD). The remaining funds will be provided by the state. The total project cost is $356.15 million.
IDA credit resources allocated for a period of 20 years with a grace period of 10 years, and the IBRD - 17 years with deferred payments in four years.
Baku-Shamakhi-Mugan is 122 kilometers in length. A total of 101 kilometers will be built within the project. The remaining section of the road has already been constructed.
Azerbaijan became a WB member in 1992. During this period, the bank has approved loans worth $2.5 billion to finance 47 projects in Azerbaijan. 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. But the bank still continues to provide funding for Azerbaijan in parallel on concessional terms.
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