At present Azerbaijan is considering the opportunities for financing the project on upgrade of engine park, Musa Panahov, the Azerbaijani First Deputy Transport Minister, told Trend. According to Panahov, at present Azerbaijan is considering opportunities for financing at the expense of own funds and attraction of credits.
The funds will be allotted out of the public budget of Azerbaijan. Azerbaijan is expected to approve almost half of funds needed for the project.
The Ministry said that the credit will be efficient for Azerbaijan, as besides the project the European Bank also plans to approve grant for development of other projects under the improvement and reconstruction of railway infrastructure.
The approval of the $50m credit at the Board of Directors of the European Bank for Reconstruction and Development (EBRD) for the improvement of engine park in the Azerbaijani railway system was postponed from 25 July to 17 October.
EBRD is planned to issue a credit in amount of $30mln for modernization, reconstruction and upgrade of engine stock of the railroad for a period of 15 years with first four years on preferential terms. Interest rate on credit is Libor +1%. During the second phase of the project ASR expects to receive more $20mln. These funds will be spent for establishment of two repair depots in Baku. European bank already issued the railroad a credit at $20.2mln in 1999. At the moment the government is repaying this credit.
Engine park shall be upgraded due to the annul increase in cargo transportation along TRASECA corridor and close opening of the projects like Kars-Ahalkalaki- Tbilisi-Baku route and North-South line.