Azerbaijan, Asian Bank to Sign Loan Agreement on Energy Project

Oil&Gas Materials 10 November 2008 13:15 (UTC +04:00)

Azerbaijan, Baku, 10 November / Trend corr. I.Khalilova / It is expected that Azerbaijan will sign a $220mln loan agreement on a project to rehabilitate electricity transmission line during Vice-President of the Asian Development Bank  (ADB) Xiaoyu Zhao's visit to Azerbaijan on 19 November, the ADB Baku Office said on 10 November.

"Authority to sign an agreement has not yet granted by the Azerbaijani side, whilst it is expected that it will be granted to Finance Minister Samir Sharifov and President of Azerenerji Open Joint Stock Company (OJSC) Etibar Piriverdiyev," the Baku Office said.

The project envisages construction of 220kV double circuit electricity transmission line from the Mingachevir Hydropower Station to the Absheron Substation, as well as unification of the 220/110kV substation with 110kV electricity transmission line. The ADB Board of Directors issued $160mln loan to realize the project in September.

Main objective of the project to increase capability of the electricity transmission line and to reduce regional imbalance in the economic growth through adequate and reliable energy supply, as well as to expand opportunities of electricity transmission and to improve quality and reliability of energy supply.

In July the Asian Bank held negotiations with the government on loan agreement. Under the agreement, loan will be issued to Azerbaijan for 25 years with five-year grace period and libor+0,2% of interest rate.

The ADB Vice-President Zhao supervises over departments for South Asia, Central and Western Asia, as well as over operations in private sector.

The Government cooperates with the ADB since 1999 and so far, the Bank has issued $304mln loan under a state guarantee to the country.

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