KfW, Azerbaijan to sign agreement on water project additional financing in summer
Azerbaijan, Baku, Feb. 15 / Trend N. Ismayilova /
German development bank KfW and the Azerbaijani government will sign a protocol to start the negotiations in February to agree the additional funding for the project of restoring water supply and sewerage system in the cities of Ganja and Sheki, KfW Baku office told Trend on Wednesday.
"The Bank and the government have already agreed to increase the funding of the project," the office said. "The protocol is expected to be signed this week. Funding will be directed to the full completion of the work in the cities of Sheki and Ganja."
"Azersu" (national water operator) told Trend on Wednesday that the bank proposed to increase funding for the project. One of the two proposed options will be chosen during the negotiations. The loan agreement is expected to be signed in summer.
While assessing the project in 2003, a total value exceeded 200 million euros. Taking into account a rise in price on materials and services, the project cost significantly increased, the office said.
"The bank implements the first phase," the bank said. "The headworks, water supply and reservoirs are planned to be constructed within this phase. The second phase will involve the construction of all sewerage system, water supply systems and connection, the third phase - sewage treatment plants."
On the basis of assessment in order to fully restore water system and construct sewage-treatment plants in these two cities the Bank proposed to significantly increase volumes of the project's financing.
Initially the German bank said it was willing to allocate additional 83 million euro: 23 million euro of them were approved by the German government in 2009, 40 million euro - in 2010 and 20 million euro - in 2011. The bank expresses readiness to allocate over 100 million euro to Azerbaijan for this project.
The budget of the project's first stage is 55 million euro. In accordance with the records signed in Berlin in October, 2006, KfW allocated a 37 million euro loan, Switzerland's State Secretariat for Economic Affairs (SECO) allocated 10 million euro as a grant. The Azerbaijani government's share in the project is 8 million euro.
SECO's funds are supposed to cover consulting services and partial restoration of Sheki's infrastructure, in particular purchase of equipment.