The Azerbaijani government refused from the loan of the OPEC International Fund of Economic Development for the project on development of agriculture in the northeastern region, the government told Trend. Taking into consideration that the project was envisaged for 4 years, the government decided that during this period Azerbaijan would be able to cover necessary expenses related to the project at expense of the internal sources. The government can resort to other finance sources, but unification of the project with international organizations will take additional time. Azerbaijan has already waste enough time as a result of the negotiations with OPEC.
The reason for refusal was commercial conditions proposed by the organization in relation to the $7.5 loan. The Finance Ministry and the Cabinet of Ministers regarded them as inexpedient. The fund usually granted loan under 2% interest rates. The Azerbaijani government has vainly waited for similar loan for 2 years.
Thus, the project will be financed by the Azerbaijani government and the International Fund of Agriculture Development (IFAD). Azerbaijan is to unify with the fund the issues of establishment of implementation group, monitoring of project implementation.
A loan agreement with IFAD was undersigned in summer 2005. Under the agreement, IFAD will allocate $12.5m from the total $25.148 for the project. Initial share of the government is $2m, the rest $1m falls to potential donors.
Azerbaijan supposed to finance the work on the improvement of the irrigation systems at expense of OPEC. The system on control and assistance to development of agriculture was established in the 48 villages of the regions Davachi, Absheron, Siyazan and Khyzy.