Azerbaijan Requests Islamic Bank to Intensify Signing of Credit Agreement to Finance Reconstruction of Hydro-power Station
Azerbaijan, Baku / corr Trend I.Khalilova / The signing of a $105mln credit agreement with the Islamic Development Bank (IDB) on the reconstruction of Phase 2 of the Hydro-Electric Power station in Mingechevir, Azerbaijan, has been delayed for technical reasons, the Cabinet of Ministers stated on 5 September. IDB is required to present the final document to the Azerbaijani Government.
The Government resolved the problem immediately as Azerbaijan was prepared to sign the document a month ago. The Islamic Bank has promised to resolve the issue in due course and the document may possibly be dispatched with the mission who is scheduled to visit Baku next week," the Government said.
Etibar Pirverdiyev, the President of Azerenerji State energy company is authorized to sign the credit agreement.
In January 2007, the Board of the Islamic Development Bank (IDB) approved the project with a credit of $80mln. Once the technical aspects of the agreement have been clarified with IDB, domestic procedures for its signature will take place.
According to the draft credit agreement, IDB presents the credit for a term of 15 years, with a grace period of 3 years, at an interest rate at 5.95%. The funds will be presented as "leasing".
Work on the Mingechevir Hydroelectric Power Station within Phase I were carried out as far back as the late 1990s. Financed by the IDB and EBRD, generators and sub-stations were replaced along with the installation of an on-land control (operating) desk. On the whole, approximately $40mln was spent on those activities ($12.5mln granted by IDB and $21mln by EBRD).