Last week the World Bank (WB) and the Government of the Azerbaijan Republic signed a loan agreement for the $230mln National Water Supply and Sanitation Project for Azerbaijan.
WB is keen on improving the living conditions and progress in Azerbaijan, as any other world country it needs provide high quality and reliable public utilities. Though under the first project the investments in the water supply system of Baku, including the WB aid, restored and improved water supply system of the city, and access to drinkable water, a problem of water supply remains unsolved in other parts of the world.
The total budget of the project and its components were estimated at $310mln, with $230mln to be allocated by the WB and the remaining funds to be allotted by the Azerbaijani government.
Two regions of the Nakhchivan Autonomous Republic (NAR) were included in the project and therefore, one more project agreement was signed with the Prime Minister of Nakhchivan, Alovsat Bakhishev.
The project, approved by the WB Board of Directors on 14 June 2007, includes three components.
In the first stage, work will be carried out in ten Azerbaijani regions (Agstafa, Bilasuvar, Geranboy, Gabala, Guba, Saatli, Oghuz, Khanlar, Tovuz, Zagatala, Hajigabul, Gazakh, Gakh, Mingachevir, Sabirabad, Samukh, Shamkir, Tartar as well as Sharur and Babak (the Nakhchivan Autonomous Republic). The project covers twenty regions of the country.
The second component finances the formulation of a Regional Development Plan for Greater Baku, which will provide the framework for future infrastructure investments (including water and sewerage investments) across the Absheron Peninsula.
The third component supports the development and implementation of key reforms needed for the modernization of Azersu and its subsidiary companies, as well as to the State Amelioration and Water Management Agency in Nakhchivan, in order to improve the efficiency and sustainability of Water Supply and Sanitation services.
The implementation of the project will be completed by 2012.
It is arguable that public funds invested in the water supply and sewerage system bring essential social benefits in the form of health expenses, which are avoided. According to the World Health Organization, every dollar invested in the sewerage economy brings social benefits in the amount of $13.