Bank to discuss loan for Azerbaijan water sector

Business Materials 7 December 2011 13:38 (UTC +04:00)

Azerbaijan, Baku, Dec 7 /Trend N.Ismayilova/

The Asian Development Bank (ADB) and the Government of Azerbaijan will hold talks on the second tranche of a $300 million project to improve water and sanitation services in the country today, Wednesday, ADB told Trend.

"Some minor technical issues need to be discussed at the meeting of representatives of the government and bank. Approval of the second tranche to improve water and sanitation services in the country by the bank's management are expected by mid-December," a bank spokesman said.

The loan will be used for completion of work to improve the water supply and sewage system in Agdash, Goychay, Nakhchivan and Beylagan.

The ADB has financed two projects to improve water and sanitation services in Azerbaijan. The first loan of $30 million was allocated in 2004 to restore the water supply system in Goychay and Nakhchivan, at a total cost of $39.9 million. Credit for the development expired in June.

The bank was allocated $75 million (first tranche) from the MFF and the Government of Azerbaijan injected a further $25 million due to the rise in price of the approved project five years ago to complete coverage of work being done in these areas.

The ADB board of directors approved the MFF to the sum of $600 million in September 2009.

The bank now plans to approve the third tranche of $175 million on December 31, 2012.

Multitranche financing has become the basis for an eight-year collaboration between the ADB and the Government of Azerbaijan, taking into account the incremental investment, supported by the strategy and programme of reforms in water supply and sanitation.

AICO Consulting Ltd / European Consultants Organisation consortium is a consultant of JSC Azersu on the water project.