Azerbaijan, Baku, Feb. 19 / Trend N. Ismayilova /
The World Bank plans to expand the support of Azerbaijani agricultural sector in 2012, WB representative in Azerbaijan Joseph Owen said during the Business Forum on the possible realization of international investment projects in Azerbaijan conducted by the Caspian and European Integration Business Club (CEIBC).
"We have not determined the volumes of financing yet. But the new project in this area will support agricultural producers, including market and other services that may be demanded," he said.
He said that WB has not determined yet the term of realizing this project. Perhaps, it may begin the process in late this year or early next year. Today the project is under development.
At present, two agricultural projects financed by WB - "Azerbaijan Rural Investment Project" (AzRIP) and II phase of the adapted development and agricultural lending program are under implementation.
A loan agreement on the AzRIP project was signed on Sept. 23 in 2004 and took effect on Dec. 29 in the same year. The project costs $21.1 million. A total of $15 million falls to loan of the International Development Association, $3.3 million - grant of the Japan government and the remained part - $1.250 million to the Azerbaijani government and beneficiaries (communities).
The Azerbaijani government and World Bank signed a loan agreement worth $21.5 million on extra financing the AzRIP in April.
The Azerbaijani government and the World Bank signed a loan agreement on the phase II of the adapted development and agricultural lending program in Azerbaijan in autumn 2006. Implementing of this project serves to increase farmers' income and agricultural productivity. The project was realized from 2007, and it is designed for four years.
The total project cost is $ 58 million, of which about $ 30 million accounted for WB loan.
Roughly $20.5 million was allocated from the funds of the International Development Association (IDA), $ 8 million - due to tightening of IDA terms, which are also designed for 35 years with a grace period of 10 years, but the rate of libor-2 percent.
The project consists of two components. The cost of the first component is $42 million, and it is designed to support agricultural business services. This component provides for strengthening of financial services in the regions, in particular the activities of credit unions that were created in the first phase of the program. It is also envisaged to strengthen the capacity of local banks, support leasing companies, information and marketing services.
The second component worth $ 14 million provides for increasing agricultural production and productivity, expanding consulting services, enhancing opportunities for the use of veterinary services, introducing new agricultural technologies.