WB reviews road projects in Azerbaijan

Business Materials 18 April 2011 13:20 (UTC +04:00)

Azerbaijan, Baku, April 18 / Trend N. Ismayilova /

The WB mission, headed by transport sector project head Jacques Bure, today reviewed ongoing road projects in Azerbaijan, the WB Baku Office said.

The mission will stay in the country until April 23. The focus is on implementing the third main project -- expanding the Baku-Shamakhi-Mugan highway from two to four lanes -- and the second road project -- modernization of the third main Alat-Masalli and Hajigabul-Bahramtepe road.

The World Bank (WB) and the Azerbaijani Transport Ministry signed a loan agreement on a project to expand the Baku-Shamakhi-Mugan Highway from two to four lanes in Aug, 2010 in Baku.

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.
The IDA credit resources were allocated for a period of 20 years with a grace period of 10 years, and the IBRD funds were provided over 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.

This project was approved by the WB Board of Directors on Jan. 17, 2006. The project targets to cut cost of road and transport projects and to raise access, transit and road security of modernization and rehabilitation of chosen sections, as well as existing corridors of East-West and North-South.

The first component includes modernization of the third highway Alat-Masalli, rehabilitation of Kurdamir-Ujar section, existing highway Baku-Georgian border, rehabilitation of existing highway Baku-Shemaha, reconstruction of highways of Tagiyev-Sahil settlement (bypass of Baku) and rehabilitation of several neighbor roads.

The second component envisages providing technical assistance, trainings, as well as stock to support the Transport Ministry in realization of the project.

The first WB credit, within this road project, totaled $200mln- which was allocated on terms of the International Bank for Reconstruction and Development (for a period of 20 years with a grace period of four years and libor+0.5 percent interest rate). The Government of Azerbaijan allocated $65mln for the first phase of the project.

The bank allocated $175 million for the Hajigabul-Bahramtepe road project in the 2009 fiscal year, of which 63 million were provided on concessional terms. The length of the highway is 116 kilometers. The total cost of the project is about $ 200 million.
The total cost of the second road project is $1.027.99 milion.