Interest rate on Azerbaijan’s allocations to Georgia on Baku-Tbilisi-Kars project to increase
Azerbaijan, Baku, Jan. 27 / Trend /
The interest rate on the loan allocated by Azerbaijan for construction of the Georgian section of the Baku-Tbilisi-Kars Railway will be reviewed, the Azerbaijan Railways reported on Thursday. In particular, it is expected that it will be brought up to five percent.
The Azerbaijani government is willing to provide an extra $500 million to finance the construction of the Georgian section, an Azerbaijan Railways source told Trend earlier. Earlier, Azerbaijan allocated a $200-million loan from the State Oil Fund of the Azerbaijan Republic to construct the section. The loan covers 25 years, with an annual rate of one percent.
At the meeting of the Coordinating Council on the Baku-Tbilisi-Kars Railway Project, held in Tbilisi on Jan. 25-26, the parties considered the issue of revising the credit agreement between Azerbaijan and Georgia and changes in interest rates on the loan.
This year, Azerbaijan will allocate 80 million manat in an investment project for the construction of the railway in Georgia, the report said.
The cost of the project of construction of the Baku-Tbilisi-Kars Railway will be revised, Azerbaijani Transport Minister Ziya Mammadov said earlier following the consultations within the project.
"Of course, the situation changes and in this regard, the cost of the project will grow, as today prices are already different," Mammadov said. He did not specify the size of the new loan, noting that this issue will be agreed by financiers.
A new 105-kilometer railroad branch will be constructed as a part of the Baku-Tbilisi-Kars Railway. About 76 kilometers will stretch via Turkey, and 29 kilometers through Georgia. Moreover, an Akhalkalaki-Tbilisi-Marabda railway section will be reconstructed in Georgia to increase transport capacity to 15 million tons of cargo a year. A point of train transition from the existing train tracks in Georgia to the European one is planned to be built in Akhalkalaki.
The construction of the Baku-Tbilisi-Kars Railway, which will connect the railway systems of Azerbaijan, Georgia and Turkey, will be completed in the first half of 2012, Mammadov told Trend earlier. But, despite the agreed terms of the implementation of the project, the sides are working to accelerate the process and complete most of the operations by late 2011.
The corridor's peak capacity will hit 17 million tons. Initially, its capacity will reach 1 million passengers and 6.5 million tons of cargo.