WB ready to consider loan issuance to improve Azerbaijan’s energy system

Business Materials 14 June 2016 20:26 (UTC +04:00)

Baku, Azerbaijan, June 14

By Azad Hasanli - Trend:

The World Bank (WB) is ready to consider the issue of issuing a loan to improve the electric power distribution system in Azerbaijan if the government shows interest in it, Larisa Leshchenko, head of WB Baku office, told Trend June 14.

"The government prioritizes the cooperation with various financial institutions," she said. "There are other priorities in relation to the WB. In fact, we have prepared everything and if the government wants to return to this project, for example, a year later, we are ready to consider it."

Leshchenko said that the initial value of the loan is $200 million.

"Of course, these are preliminary figures," she said. "It is early to speak about the final amount of the loan as no negotiations were held on this issue and a corresponding protocol was not signed."

The WB showed an interest in the project to improve the electric power distribution system in Azerbaijan in the second quarter of 2015. In this regard, two WB missions have already visited Azerbaijan.

At present, Azerbaijan's energy system is planned to be reconstructed and modernized only as part of the investment program of the Asian Development Bank (ADB) worth $1 billion. The memorandum was signed in May 2015. According to the project of the investment program, ADB will allocate $750 million by three tranches ($250 million each), the remaining $250 million will be allocated by the Azerbaijani government. As for the first tranche, the issue is expected to be discussed by the WB Board of Directors on June 22.

The allocated funds are planned to be used to upgrade the power grid, substations, improve services rendered to the customers, replace existing meters with digital ones, strengthen Azerishig state energy distribution company's personnel.

Azerbaijan has become a WB member since 1992.