World Bank assists Azerbaijan in restoring degraded land
Azerbaijan, Baku, Feb. 3 / Trend A. Akhundov /
Azerbaijani agriculture minister Ismat Abasov and World Bank's Agriculture and Rural Development Sector Manager Dina Umali Deininger held a meeting in Baku to discuss the country's adapted development programme and agriculture crediting phase III, the ministry said today.
The purpose of the meeting was to discuss the initiative of conducting a pilot scheme aimed at improving agricultural production in one of Azerbaijani regions alongside restoring fallow land as part of a government proposal.
During the meeting the minister stressed the opportunities of intensifying the cooperation between Azerbaijan and the World Bank (WB).
The WB Baku Office told Trend earlier that the bank plans to allocate $35-40 million for Azerbaijan to implement the adapted development programme and agriculture crediting phase III.
The loan come from the funds of the International Bank for Reconstruction and Development (IBRD is part of the World Bank). Its terms will be clarified during the negotiations.
Agricultural projects in Azerbaijan were previously financed on concessional terms, through the International Development Association (IDA), but today Azerbaijan has no access to its funds. The project is expected to be approved in 2012.
The development of the concept was launched within the second phase of the adapted programme and completed in February 2012. Implementationt contributes to increasing farmers' revenues and productivity of agricultural enterprises. The second project was started in 2007.
The total cost is $59.5 million, $29.2 million of which is the WB loan. The International Development Association (IDA) allocated $20.5 million. Some $8 million was allocated but under IDA tough terms.
The government allocated $12.6 million, PHRD (Japan PHRD technical assistance grants programme) - $1.61 million, turnover means - $9.56 million and funds of financial mediators - $4.7 million.
Under the implementation of the second phase of the adapted programme of agriculture development and lending, 46,000 small loans worth 62 million manat were allocated. This led to an increase in investment volume in rural areas.
Medium size enterprises in the agricultural sector were allocated 110 investment loans worth $17 million. Also 74 grants were allocated to introduce and transfer advanced technology under the second phase.
The project consists of two components. The cost of the first is $42 million and designed to support agricultural business services. It is also planned to strengthen the financial services in the regions and in particular the activity of credit unions that were created within the first phase of the programme. The potential of local banks is planned to be strengthened.
The second component is worth $14 million. It includes increasing agricultural production and productivity, expanding consulting services, using veterinary services and introducing new agricultural technology.
The official exchange rate is 0.7863 AZN/USD on Feb. 3.