Baku, Azerbaijan, Mar. 15
By Azad Hasanli – Trend:
As of Jan. 1, 2017, Azerbaijan spent $1.5 billion or 71.9 percent of loans of the Asian Development Bank (ADB), according to a report on the government’s activity in 2016.
Azerbaijan spent ADB loans worth $747.1 million in 2016. The bank has allocated $2.12 billion since 1999 for the implementation of 17 projects in the country. Currently, implementation of five projects worth $639.3 million has already been completed, while the implementation of 12 projects worth almost $1.5 billion continues.
The report says that Azerbaijan and the ADB signed an agreement in 2016 on three projects – loan and guarantee agreements on investment program for reconstruction of Azerbaijan’s power grid, loan agreements on countercyclical support and financing of the Southern Gas Corridor (SGC).
In May 2015, Azerbaijan and the ADB signed a memorandum of understanding (MoU) on investment program worth $1 billion that envisages the reconstruction and modernization of the country’s energy system. The ADB will allocate $750 million within three tranches ($250 million per each) and the remaining $250 million will be provided by the Azerbaijani government.
The loan agreement on countercyclical support worth $500 million was signed in December 2016. The loan resources were allocated to Azerbaijan for social security, creation of jobs and diversification of the economy in order to mitigate the negative consequences of the decline in oil prices, said the ADB in a message.
The loan agreement worth $1 billion for the Southern Gas Corridor project was also signed in December 2016. The agreement includes a loan worth $500 million for the Southern Gas Corridor CJSC and $500 million in the form of partial credit guarantees (PCG) on commercial loans worth $526 million, allocated by a consortium of international banks for the Southern Gas Corridor CJSC, in which 51 percent of shares belongs to the government of Azerbaijan, and 49 percent – to Azerbaijan’s state oil company SOCAR.
The ADB loan will allow obtaining additional revenues, which the government will be able to use in social sphere and continue efforts on diversification of the country’s economy.
ADB, based in Manila, was established in 1966 and is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.