Azerbaijan, Baku, Oct. 31 / Trend A.Akhundov /
Azerbaijani government and the World Bank (WB) consider that development of a fundamentally new project in agricultural field is necessary. This was reported to Trend by the government.
"The new project is being developed, and it depends on whether the country will show interest in it. Basically, the government is interested in it, as this branch of the economy is a priority. It is necessary to prepare a new project that would meet the modern challenges," the WB Baku Office in Azerbaijan told Trend on Wednesday.
According to the information, it can be developed within the III phase of adapted development and agricultural lending program in Azerbaijan, or as an independent project.
In February, the bank completed the II phase of the adapted development and agricultural lending program in Azerbaijan, the credit agreement of which was signed in the autumn of 2006.
This project is aimed at increase of farmers' income and agricultural productivity.
The total cost of the project is $ 59.5 million, with $ 29.2 million falling to the share of WB loan. Moreover, the International Development Association (IDA) allocated $ 20.5 million , and eight million dollars were allocated through the tightened terms of IDA for period of 35 years with a grace period of 10 years, but with the libor rate of two per cent.
The government granted $ 12.6 million to the project, PHRD (Japan PHRD technical assistance grants program) - $1,61 million, $9.56 million falls to the share of working assets , $4.7 million - to the share of financial intermediaries.
As part of the second phase of the adapted development and agricultural credit program some 46.000 small loans worth $ 62 million were allocated, which led to increase of investments in rural areas. Medium-sized enterprises in the agricultural business sector have been granted 110 investment credits for $ 17 million. Also 74 grants were allocated within the second phase to introduction and transfer of improved technologies.
The WB Baku Office stated that the second "Azerbaijan Rural Investment" (AzRIP-2) project will come into force in the coming weeks.
"Procedural and technical issues on the launch of the project are currently being settled," the bank said.
Previously, in October, the Azerbaijani government and the International Bank for Reconstruction and Development (IBRD, part of the WB group) signed a loan agreement on AzRIP-2.
The project cost is $ 53.6 million, with $30 million provided by the IBRD, $23,6 million - through Azerbaijani government's share in the project..
This project is launched based on the results of the first project, which increased income of 600.000 farmers, improved irrigation service for 700.000 people and provided safe drinking water to 150 rural residents. The project will cover five main areas - Shirvan flat, Mugan-Salyan, Nakhchivan, northern and north-western areas.