Azerbaijani Government Extends Talks with Asian Development Bank on Multitranche Package of Road Projects

Business Materials 24 August 2007 11:43 (UTC +04:00)

Azerbaijan, Baku / Trend corr I. Khalilova / Negotiations between the Azerbaijani Government and Asian Development Bank (ADB) regarding a multitranche package on road projects and a $500mln credit agreement to reconstruct sections of the Massali-Astara Highway have been extended for another two weeks, according to the ADB Baku office. The talks were expected to be completed by 20 August.

"The approval date of a credit agreement to reconstruct part of the highway and multitranche package at the ADB Board of Directors depends upon the results of the talks," a Government official said. Originally scheduled for 28 August, negotiations have now been postponed to the end of December.

The talks began in Baku on 7 August and the experts left the country on 9 August. They will be continued via correspondence and as a result a protocol will be signed.

The Azerbaijani Finance Ministry's refusal to sign a final protocol caused the negotiation process to be delayed, according to the Government official. Reasons for the refusal are due to Azerbaijan having no project financing practice within the framework of Multitranche Financing Facility (MFF) mechanism, therefore the Ministry intends to obtain the approval of the Cabinet of Ministers.

Within the framework of MFF, ADB will allocate $500mln to Azerbaijan. The funds are intended to finance the three road projects (including Masally-Astara).

To date one project has been agreed upon. The ADB will allot $200mln for its implementation. The negotiations on the credit agreement regarding the reconstruction of a section of Massaly-Astara highway were held on 8 August. The remaining agreements will be co-ordinated at the next stage.