Restructuring of major World Bank project launched in Azerbaijan
Azerbaijan, Baku, Oct. 31 /Trend A.Akhundov/
The World Bank (WB) and the Azerbaijani government launched work on restructuring Railway Trade and Transport Facilitation project. This was told Trend in Baku office of the World Bank on Wednesday.
"Initially, the project involved the purchase of locomotives, however, work on electrification, creation of a modern system of signals required more money than planned. So we decided to redirect the funds provided by the bank for these components. Acquisition of engines will be implemented on following stages at the expense of the state or from other sources that will be defined by the government, " the bank stated.
Restructuring will not affect the funding volumes of WB. The bank provided $ 450 million to Azerbaijan for funding of this project.
"The principal agreement is ready, work has already been launched and the appropriate procedures are currently being carried out. Formal restructuring will be completed in the near future", the representative of World Bank said.
The credit agreement between the government and the WB was signed in December 2009. The total cost of the project promoting rail transit and trade is $ 795 million with $ 450 million falling to the share of WB loan. The project is part of a state program on improvement of rail infrastructure in Azerbaijan (2008-2013) with a total cost of 1.2 billion manat.
WB credit resources are provided through the International Bank for Reconstruction and Development (IBRD) for a term of 23 years with a grace period of eight years. The commission on the loan, which will be paid by the borrower, is set at 0.25 per cent. Mortgage payments will be made twice a year, on June 15 and December 15.