World bank's all active projects in Azerbaijan

Last week the World Bank (WB) announced a new Country Partnership Strategy (CPS) with Azerbaijan, which provides the framework guiding the World Bank Group's assistance to Azerbaijan for 2011-2014.

The new Strategy builds on the government's own development priorities and centers on two key areas. The first area is focused on strengthening the non-oil economy, primarily through an improved business environment, better infrastructure, and agriculture improvements. The second area is focused on improving the effectiveness of social and community services, including health, education, social protection and water supply.

"While Azerbaijan weathered the recent global economic crisis relatively well, the crisis has underlined the need for a diversified economy, market-based policies, and strengthened social services and support,", WB Regional Director for the South Caucasus Asad Alam said. "As the government prepares to meet these emerging needs and challenges, this World Bank / International Finance Corporation strategy seeks to support the country in this endeavor," he added.

The bank reported that irecent years, Azerbaijan's GDP has risen sharply and poverty has fallen dramatically, led by increasing oil and gas revenues.  Its remarkable success in reducing poverty from 49 percent in 2001 to 16 percent in 2008 was largely driven by very high growth rates which averaged more than 20 percent for the period. 

"However, much of the rapid growth stemmed from a large increase in oil and gas revenues which are now likely to flatten over the coming decade and decline thereafter. That's why economic diversification and development of non-oil sector are becoming more important," the bank's statement reads.

The new Strategy has a number of distinctive features.  First, the focus will be on accelerating the implementation of existing projects.  Second, new investments will be undertaken selectively in the areas where there is clear Government's demand and ownership and a strong record of institutional capacity.

"Boosting human capital development and resolving key institutional weaknesses are going to be critical for developing the non-oil sector as a relevant source for growth," WB Country Manager for Azerbaijan Joseph Owen said. "We will also be focusing on our large undisbursed portfolio and be giving a priority to accelerating project implementation."

For the full Strategy period of four years the Government has requested a total investment of about $ 1 billion. In the first two years, lending is anticipated to be around $ 380 million. With Azerbaijan's per capita income of $ 4,820 (Atlas method, 2009), which is now placing the country in the group of the middle income countries, 2011 will be the last year when the country will receive concessional financing from the World Bank.  

International Finance Corporation (IFC), the World Bank Group's private sector lending arm, will increase its investment program to about $ 200 million during this period

The Bank will increase its analytical work in the areas of job creation and growth, poverty and inequality, financial sector, agriculture and irrigation, wastewater, and public expenditures. 

Since joining the IBRD in 1992 and IDA in 1995, the World Bank commitments to Azerbaijan total approximately $3 billion in 43 projects. Commitments from the IFC, since Azerbaijan joined in 1995, amount to almost $ 350 million in 45 projects.

The Bank currently finances 20 projects worth about $2 billion. They cover the area of transport, water and sanitation sector, agriculture, irrigation, health and education.

Schedule of WB active projects in Azerbaijan

Project Name



Approval Date


Third Highway Project





Second Additional Financing Highway II





Public Investment Capacity Building Project





ARP/II-Integrated Solid Waste Management










Social Protection Development





Second National Water Supply and Sanitation Project





Highway 2 - Additional Financing





Second Education Sector Development Project





Rural Investment Additional Financing















IDP Economic Development Support Project -- Additional Financing















Judicial Modernization Project





Health Sector Reform Project










Highway 2





Power Transmission Project





IDP Economic Development Support Project





Pension & Social Assistance Project





Rural Investment Project (AZRIP)




1. Project on reforming the health system

A mission headed by the World Bank's senior specialist on health Patricio Marquez visited Baku from 13 to 20 October to review the project on reforming the health system in Azerbaijan.

The project on reforming the health system in Azerbaijan has four main components:

- Strengthening the management capacity of the Ministry of Health, sectoral policy, planning and regulation policies;

- Improving the quality and efficiency of health services in five pilot regions, which includes the modification of primary-level services at the regional level and construction of three regional hospitals, enhancing communication between primary and secondary levels of health introduced in these regions;

- Reform of health financing, gradual transition to the principles of compulsory medical insurance;

- Improving human capacity, including a certification program for medical staff.

The project is approved by the Board of Directors of the World Bank June 29, 2006, and its implementation began in December of 2006. The total project cost is $ 86.75 million, $ 50 million of which allocated by the WB, and the the Azerbaijani Government's share in the project is $28.25 million. The remaining funds are allocated by the World Health Organization, UNICEF and USAID.

This is the second project to reform health, financed by the World Bank. WB's first loan hit $ 5 million. Implementation of the first project was completed in September 2006.

2. Rural Investment Project

So far, about 170 micro projects worth $6 million in total have been implemented in Azerbaijan within the second phase of the WB agricultural project. A total of 340 projects worth $21.1 million were realized under the first phase. The projects whose cost hits $50,000-60,000 will be realized after receiving agreement of the WB for financing. Moreover, the projects which cost less than $50,000-60,000 will be financed directly.

A loan agreement on the AzRIP project was signed on Sept. 23 in 2004 and took effect on Dec. 29 in the same year. The project costs $21.1 million. A total of $15 million falls to loan of the International Development Association, $3.3 million - grant of the Japan government and the remained part - $1.250 million to the Azerbaijani government and beneficiaries (communities).

Loan agreement on additional funding for the Azerbaijan Rural Investment Project in a total amount of $21.5 million was signed between the Government of Azerbaijan and the World Bank in April. Additional funding is provided in connection with the expansion of coverage of the project, respectively, period of its implementation extended for three years. The project is scheduled to be completed until March 2012.

3. Water supply project

The mission led by water sector manager Wael Zakut visited Baku in September to review the first and second projects to improve water supply and sewerage systems in small towns in Azerbaijan, as well as the preparation of a project to construct deep sewerage works from Hovsan sewage aeration station in the Caspian Sea.

Under the first water project, which covers 22 regions, the World Bank allocated $230 million of total cost worth $310 million. As a result of implementation of the first project at least 700,000 people will be provided with water and take advantage of the sewerage service. Implementation of this project is scheduled for 2012.

The World Bank's second project to improve water supply and sewerage systems in small towns in Azerbaijan covers 21 regions, five of them are located in the Nakhichivan Autonomous Republic, the rest are Kurdamir, Ujar, Zardab and other regions of the country.

Initial cost of project is $109 million, $92 million of which will be allocated from the International Bank for Reconstruction and Development (IBRD is part of the WB group).

Implementation of measures for waste water treatment in Hovsan was initiated at the expense of a French bank loan. At present, the aeration station is being re-equipped with French technology. However, additional funds are required for the construction of a more extended pipe for waste water discharge into the sea and World Bank took the responsibility for the realization of this task. Under the project, the plant will be located 15 kilometers from the center of Baku.

4. Educational project

Azerbaijani Government and World Bank Group (WBG) determined the second phase of the credit program for the development of the education system of Azerbaijan. The first phase of WB project on development of education system in Azerbaijan was completed in 2008.

The loan agreement between the World Bank and the Government of Azerbaijan for the project in the field of education was signed on Sept. 19, 2003. A loan of $18 million was provided under the rules of the International Development Association. Other $2.80 million for the project is the share of the Government of Azerbaijan, and $0.18 million - funds of the Soros Foundation.

Earlier, the World Bank has implemented a pilot project of education reform in the country due to its credit totaling $5 million.

The new project will facilitate the development of new curricula based on the updated phase I of the curriculum and training for teachers, which are designed to ensure the new programs.

The main components of the project are to improve the quality and management of education, work with pre-school educational and vocational educational institutions. It also includes tutorials, continuation of reforms in curriculum, application of new technologies.

 5. Project to improve social conditions of internally displaced people (IDP EDSP)

The Azerbaijani government and World Bank (WB) signed an agreement to grant $15mln for the expansion of the project to improve social conditions of the internally displaced people (IDP EDSP) in May 2008. WB approved this loan in March 2008. Government's share in the project amounts to $5mln.

The additional loans aim at financing micro projects regarding IDPs, which are implemented by the Social Development Fund of Refugees and IDPs of Republic of Azerbaijan. Micro-projects were carried out in infrastructure and service sphere including reconstruction of roads, energy supply, water supply, and construction of artesian wells.

All these measures were carried out with the funds worth $11.5mln, which were approved in the Board of Directors of the Bank on 15 February 2005. The funds for this project have been granted for 35 year period, with a grace period of 10 years with 0.75% interest rate.

6. Railway project

The total cost of the project to support transit by rail and trade hits $673.8 million, of which $450 million fall to the WB loan. The loan agreement was signed this year. The project is part of a state program to improve the railway infrastructure of Azerbaijan (2009-2014) worth 1.2 billion manat.

The credit resources are allocated by the International Bank for Reconstruction and Development (IBRD) for a term of 23 years with a grace period of eight years at a cost - a six-month libor plus spread is changing. Commission on the loan, which will be paid by the borrower, was determined at the level of 0.25 percent. Payments on the loan will be made twice a year - June 15 and Dec.15.

The project consists of three components. The first envisages rehabilitating the railway sector, namely the plot from Baku to the Georgian border, the transition from 3.3 kV DC to 25 kV AC, and replacing the signal system due to the transition to an electric power system.

The second component envisages the purchase of 50 electric locomotives and the third - aligning the railway department's activity with the requirements of a market economy. The government is already considering converting the company into a joint stock form.

7. Third road project

The World Bank (WB) and the Azerbaijani Transport Ministry signed a loan agreement on a project to expand the Baku-Shamakhi-Mugan Highway from two to four lanes in Aug, 2010 in Baku.

The bank will allocate $241.6 million to finance the project in the form of mixed credits - $70 million will be funded by the WB International Development Association (IDA), and $171.6 million will be provided by the International Bank for Reconstruction and Development (IBRD). The remaining funds will be provided by the state. The total project cost is $356.15 million.

The IDA credit resources were allocated for a period of 20 years with a grace period of 10 years, and the IBRD funds were provided over 17 years with deferred payments in four years.

Baku-Shamakhi-Mugan is 122 kilometers in length. A total of 101 kilometers will be built within the project. The remaining section of the road has already been constructed.

8. Second road project

This project was approved by the WB Board of Directors on Jan. 17, 2006. The project targets to cut cost of road and transport projects and to raise access, transit and road security of modernization and rehabilitation of chosen sections, as well as existing corridors of East-West and North-South.

The first component includes modernization of the third highway Alat-Masalli, rehabilitation of Kurdamir-Ujar section, existing highway Baku-Georgian border, rehabilitation of existing highway Baku-Shemaha, reconstruction of highways of Tagiyev-Sahil settlement (bypass of Baku) and rehabilitation of several neighbor roads.

The second component envisages providing technical assistance, trainings, as well as stock to support the Transport Ministry in realization of the project.

The first WB credit, within this road project, totaled $200mln- which was allocated on terms of the International Bank for Reconstruction and Development (for a period of 20 years with a grace period of four years and libor+0.5% interest rate). The Government of Azerbaijan allocated $65mln for the first phase of the project.

9. Project of modernization of capital market in Azerbaijan

The final decision on the project funding is scheduled for late January - early February 2011

WB is considering to approve about $5-10 millions for capital market development in Azerbaijan. $73 million preferential loan is possible to be provided from the quotas of the International Development Association (part of the WB) for Azerbaijan in 2011 fiscal year to finance this project.

This program includes three projects - further development of the national postal operator Azerpoct's activity, strengthening of capital market players' potential and protection of users of financial services.

It is planned to implement the project of capital market development by late 2010. Currently, the program First Initiative, funded by various international donor agencies and World Bank, conduct refinement of design project. In general, the State Committee for Securities has reached an agreement with First Initiative on the financing and technical support in preparing the strategy for capital market development in Azerbaijan.

This will be the third loan of World Bank for the financial sector and the latest loan on preferential terms. The bank allocated $5.4 million on the implementation of the first project of technical assistance for the financial sector (FSTA) and $12 million for the development of financial services.

10. Corporate and Public Sector Accountability Project (CAPSAP)

The project is funded by WB ($11 million), the Japanese government ($3 million), the Swiss State Secretariat for Economic Affairs ($2 million), and the Azerbaijani government ($8 million). The total project cost is $24 million. A loan agreement for the project was signed in September 2008.

The project is comprised of three components. Within the first segment it is planned to reform the accounting in the corporative sector, including the application of the International Accounting Standards in the organizations of public importance, assistance in the development and adoption of the new law on audit and the development and reformation of the Auditor Chamber.

11. Project on pension reforms and social security

The project on pension reforms and social security in Azerbaijan has been implemented since 2005 jointly by the Government of Azerbaijan and the World Bank.

The project focuses on providing technical assistance in the preparation and implementation of targeted social aid (TSA) program in the country, which commenced on July 1, 2006.

WB has allocated $10 million for project for 35 years with 10-year grace period and interest rate of 0.75% per annum, of which $5 million was provided for the State Social Protection Fund and Labor Ministry. The loan agreement between the Government of Azerbaijan and the WB was signed on Sept. 23, 2004, and entered it into force on Nov. 11, 2004.

The project consists of three components: improvement of the management system of social assistance, improvement of management of social insurance, project management, monitoring and evaluation of the project. The project is aimed at improving the administration of pension and social security.

12. Project to develop social protection

The Azerbaijani government and WB signed the agreement on this project worth $54.6 million in November 2008. WB will allocate a loan worth $26.7 million under the International Development Association (for 35 years with grace period of 10 years and 0.75 per cent per annum) to finance the project. The project will last five years.

The project includes four components: a complete modernization of the labor market, including the improvement of labor legislation, protection of labor, activity of employment service, formation of  policy of the social security system, modernization of the pension system and project management.

The project envisages full institutional development and upgrading professional training system, development of professional classifiers in line with the European practices. It is expected to create the centers of professional training under the ministry. The project covers five-years from 2008 to 2013.

13. Ecological project

For the project on clean-up of oil-polluted lands of Absheron, WB is ready to provide $250-300 million for several years to clean up groundwater, household waste, cleaning of radioactive iodine-bromine production of waste and cleaning of oil polluted lands. About $75 million can be allocated for the last two lines.

The new project will be provided to upgrade the landfill of radioactive waste. The landfill is designed for wastes of two iodine production facilities in Surakhani and Ramani settlements in the Absheron Peninsula. Also the project provides clean-up in the territory of 800 hectares in the area adjacent to the Baku International Airport named after Heydar Aliyev.

14. Project on crediting and developing of agriculture in Azerbaijan (ADCP-2)

The agreement on the credit the World Bank Directors Council approved June 29 under the Phase 2 within Agriculture Development and Crediting Program of Azerbaijan (ADCP-2) might be signed in September 2006.

The project suggests farmers crediting through credit unions and through banks and leasing agencies.

Total project cost is $58 million, of which about $30 million accounted for WB loan. In addition, the International Development Association (IDA) allocated $20.5 million, and $8 million - due to tightening of IDA, which is also calculated for 35 years with 10 years grace peruod, but the rate of libor-2% (currently 3% per annum).

15. Project on establishing land cadastre

One of the best systems for registration of real estate will be created in the country after implementation of the project "Real estate registration in Azerbaijan", head of the technical team of World Bank project Kevin Adlington said in Baku during the international workshop on the topic "Efficiency and Transparency in real estate management". Since 2008 from the beginning of the project in Azerbaijan, the Government had undertaken several activities in this direction in order to improve the system of registration of real estate. However, today most of the funds from the WB loan has not been spent, as at persent only the initial stage of the project is being implemented.

The Azerbaijani government and WB signed an agreement on the joint introduction of a unified cadastre of real estate in July 2007. The project consists of four components: registration of property, management and register of state property, base cartography and land cadastre, trainings, forming of policy and management of project.

Cost of the project hits $38.57 million; $30 million falls on loan of WB. The rest part will be paid by the Azerbaijani government. Loan resources were allocated for 20 years under 5-year preferential period.

16. Upgrading justice system

On October 3, a credit agreement was signed between the World Bank (WB) and the Azerbaijani Ministry of Justice regarding the modernization of court and legal system in Azerbaijan

the project amounts to $35.6 million, with $21.6m from the WB, $3m from Japanese Special Fund and $11m fro the Government of Azerbaijan. The project is intended for 5 years.  

The WB credit was presented in line with the International Development Association in accordance with standard terms of 35 years with 10 years of grace period and annual interest rate of 0.75 percent. Up on the completion of 10 years of grace period, the payment for the credit will begin with 1.25 percent and from 2026 to 2041 by 2.5 percent. 

The project comprises of four components:

- To strengthen the management capacity of the juridical institutions by

establishing computerized system of management, information network and training.

- To increase the opportunities of the courts - construction and repair of court buildings, application of contemporary technologies and computerization in the management system.

- To increase the professionalism of courts through trainings and regular studies. 

- Pilot programs for civil information that improves the access of citizens to the information about the registration and notary.
On 29 June 2006, the WB Council of Directors approved the allocation of the credit for the court-legal system of Azerbaijan.   

17. SCADA energy project in Azerenerji

The project in rehabilitation of the energy transmission system is ending in December.

Within the project, the French AREVA Company assists in bringing 60 high-voltage substations in Azerbaijan into full compliance with the requirement of SCADA (single dispatch system). The task of the company was to connect all stations to the three dispatch centers established in Azerenergy JSC under the first phase of the SCADA project. With this regard it was planned to lay down approximately 1,000 kilometers of cable.

Creating a SCADA system will allow operatively reacting to the situation in the energy network, as well as improving the efficiency of energy supply and reduce losses. The project envisages equipping SCADA system to all regions of Azerbaijan.

The total project cost is estimated at $55 million, of which $48 million was provided by the World Bank and $7 million - the Government of Azerbaijan. The WB Board of Directors approved a loan on May 17, 2005, and it became the first of credits allocated to the country under the conditions of International Bank for Reconstruction and Development.

France suspends all flights with Brazil due to virus variant
France suspends all flights with Brazil due to virus variant
UK records another 2,472 coronavirus cases, 23 deaths
UK records another 2,472 coronavirus cases, 23 deaths
Southern Gas Corridor increases liquidity in European gas markets
Southern Gas Corridor increases liquidity in European gas markets
Loading Bars
France suspends all flights with Brazil due to virus variant
UK records another 2,472 coronavirus cases, 23 deaths
Boeing reports first quarter deliveries
Biden set to withdraw U.S. troops from Afghanistan by Sept. 11
Number of COVID-2019 cases across globe up by over 567,000 in past day — WHO
Iranian nuclear deal meeting in Vienna rescheduled to April 15
Kazakhstan expects positive dynamics in oil industry
Erdogan reveals stricter COVID-19 measures in Turkey during Ramadan
Iran's annual iron ore concentrate output nears 50mn tons
Deputy Finance Minister: Georgia ranks first in Europe with economic growth rate according to IMF
Southern Gas Corridor increases liquidity in European gas markets
Uzbekistan-India trade grows to record high in 2020
Azerbaijan plans to organize personal account system for auditors
China's 2M2021 import of Azerbaijani products surges in value
Exchange of all data necessary to conduct effective demining is required - OSCE MG
Baku to host international gymnastics competitions again
German gov't approves uniform nationwide COVID-19 response measures
Russia's daily COVID-19 cases record lowest in months
Iran to start 60% enrichment tonight: Nuclear spokesman
Israel to allow vaccinated tourists in starting late May
Biden confirms invitation to Putin to take part in climate summit
Presidents of Azerbaijan, Belarus have informal meeting
IMF unveils forecast on Azerbaijan's oil export for 2021-2022
Azerbaijani FM, Romanian ambassador stress high level of development of bilateral political relations (PHOTO)
Special equipment of Belarus assembled in Azerbaijan may be exported to Turkey
Azerbaijan's Foreign Ministry responds to Armenia's statement on War Trophy Park
President of Belarus pays working visit to Azerbaijan (PHOTO)
Moscow, Tehran attach great importance to North-South Corridor – Russian FM
Azerbaijani president gives weighty answer to Armenia’s disinformation campaign - Official (VIDEO)
Belarus reveals plans for oil purchases from Azerbaijan
Kazakhstan’s FlyArystan launching direct flights to Georgia
Iran's Energy Exchange announces products to be on sale on April 14
International Bank of Azerbaijan opens tender to buy printed materials
Azerbaijan's Aghdam needs to be fully rebuilt - German historian (VIDEO)
Azerbaijan's PM meets with BP's regional president
Ukraine may take part in restoration of Azerbaijan's liberated lands
Azerbaijani Finance Ministry places short-term bonds on auction
Iron ore concentrate production by major Iranian companies increases
President Ilham Aliyev: Pakistan was among countries that openly supported Azerbaijan from first days of confrontation
Iran’s Bahar Azadi gold coin price again falling
Sudan due to send first delegation to Israel next week
Liabilities of Bank Melli Iran’s Baku branch increase
Armenia obligated under int'l law to provide mine maps to Azerbaijan - Matthew Bryza
Footage from Azerbaijani Jabrayil's Sadi village (VIDEO)
Azerbaijan, Ukraine discuss full resumption of mutual flights
Oil exports via Barents Sea in Lukoil system increased
Hydrometeorology in Azerbaijan needs young experts for technologies - ministry
Azerbaijan shares latest data on mine clearance work carried out on liberated lands
Co-op between Iran, Russia to be effective in activating nuclear deal – Rouhani
2021 demand for OPEC crude to be higher than in 2020
Assets of Iranian Bank Melli's branch in Azerbaijan increase
On Independence Day eve Israel's population over 9.3m
Iran still waiting for S.Korea to provide solution, release its blocked assets
Azerbaijan issues data on number of COVID-19 vaccinated citizens
Azerbaijan confirms 2,457 more COVID-19 cases, 2,002 recoveries
OPEC revises up forecasts for Azerbaijan’s 2021 liquids supply
Rosatom can take part in developing green energy in Azerbaijan - expert
Repairing of last well in Iran's Naft Shahr field launched
Iran in favor of strengthening relations with Russia – President Rouhani
Azerbaijan Railways builds co-op on transiting additional goods
IMF talks forecast of money supply growth in Azerbaijan for 2021-2022
European Hydrogen Backbone’s updated cost revealed
IMF predicts growth for Azerbaijan's oil, non-oil GDP
Cargo movements in Iran’s Qeshm port down
Azerbaijan expects tourism sector to recover by summer
Plan on budget revenues surpassed in Kazakhstan
Scotland to ease some COVID-19 restrictions early
Around 70% of European infrastructure to start transporting hydrogen
U.S. will base 500 additional troops in Germany
Russia documents 8,173 coronavirus cases in past day, lowest figure since September 28
Kazakhstan names value of payments of compulsory vehicle insurance
Iran's mobile phone imports increase
Azerbaijani president signs order on hosting European Football Championship matches in Baku
Kazakhstan drafts pricing rules for exported crude oil, gas condensate
Retail trade indicators decrease in Kazakhstan
Kazakh Gas Refinery opens tender to buy spares
Kazakhstan records decrease in oil output
Belarusian IT company keen to expand its activities in Azerbaijan's transport sector
Iran’s Jam Petrochemical Company announces its production plan
Uzbekistan building modern wastewater treatment facility at Uzbekneftegaz GTL plant
Kazakh Gas Refinery opens tender to buy engines
Russian, Azerbaijani military discuss Iskander-M missile debris in Karabakh region - Russian official
Greece can take slightly more than 1 mcm/d via TAP
President Ilham Aliyev: Liberation of territories will be additional opportunities
President Ilham Aliyev: Armenians did it deliberately in order to erase legacy of Azerbaijani culture in order to erase these territories from our memories
Together with Russian president, we discussed issue about Iskander-M missile – Azerbaijani president
TAP supplies to Greece cause contraction in LNG imports
Kazakhstan attracts investments to develop national parks in Almaty region
European Commission makes statement on TAP
Russia’s Federal Air Transport Agency allows flights from Irkutsk to 3 countries
President Ilham Aliyev: I had a strong feeling during negotiations that Armenia doesn’t want a solution
President Ilham Aliyev: I think we need to be more active in order to try to build bridges
ADB focuses on renewable energy projects in Georgia
US eyes to continue negotiations on direct flights with Georgia
Bank of Georgia discusses revised outlook for country’s economic growth in 2021
Anabechdi company plans to produce textile in Georgia
Georgia to receive significant funds from IMF
Azerbaijan reveals 2M2021 data lending to energy, chemistry, natural resources sector
Georgian E-Space company looks to export its software
Death toll from coronavirus pandemic in Iran exceeds 65,000
All news