ADB, Azerbaijan signs loan agreement on water project
Azerbaijan, Baku, June 6 /Trend A.Akhundov/
The Azerbaijani government and the Asian Development Bank (ADB) signed a loan agreement under the second tranche of the multi-tranche package to improve water and sanitation services in the country, the Baku office of the bank said on Wednesday.
The bank had previously approved a second tranche of $300 million to improve water and sanitation services in Azerbaijan in January, 2012. The loan will be used to complete the work within the system to improve water supply and sanitation in Agdash, Goychay, Nakhchivan and Beylagan.
ADB's loan has a 24 - year term with a 4-year grace period and interest set according to its LIBOR - based lending facility. The Government of Azerbaijan is providing $110 million. The State Amelioration and water Management Committee of the Nakhchivan autonomous republic will act as the executing agency for the project activities in the town of Nakhchivan and Azersu will serve as executing agency for other project towns.
In addition in November, 2012, the bank plans to approve the third tranche worth $175 million.
The Asian Development Bank 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. Terms of disbursement of the credit expired on June 30, 2011.
Due to the rising costs of the project approved five years ago and for the full scope of work in these areas, the bank allocated $75 million (first tranche) as part of the multi tranche financing (MFF) and the Government of Azerbaijan allocated $25 million.
The MFF was approved by the board of directors at the Asian Development Bank in September 2009 to the sum of $600 million.