Azerbaijan, Baku, April 29 / Trend I. Khalilova /
The Asian Development Bank (ADB) is ready to consider funding for the improvement of railway infrastructure in Azerbaijan, after the approval of state programs in this area, Baku representation of the bank said.
Despite the fact that the ADB in November 2009 planned to approve the program of multi-trench financing at the Board of Directors, the government finally settled on its sources of funding for this area due to delays in the approval of the state program.
Taking into account the uncertainty, the Asian Development Bank has frozen the continued technical assistance after the completion of its first stage, within the scope of the study to improve the railway infrastructure. The second phase included the selection of the project.
Technical assistance has been provided by the bank to the amount of $1 million.
The estimated amount of funding for the development of Azerbaijani Railways was determined by ADB to the amount of $ 200 million, which was planned to allocate at the expense of ordinary capital resources.
It was reported about the ADB's readiness to allocate $550 million to improve the railway infrastructure in Azerbaijan under the MFF. This multi-trench mechanism provides the concentration of several rail projects in one package.
In its proposal, the ADB for the first time on this project expressed willingness to soften the terms of financing for non-concessional loans with libor +0,6 percent to libor +0,2 percent. The bank was willing to provide funds for 25 years with a grace period of eight years. Besides interest on the loan, the Asian Development Bank proposed to reduce fees and service charge (from 0.35 percent to 0.25 percent). Presumably, the ADB's funds might be proposed on the second stage of improvement of railway infrastructure in the country - the purchase of new rolling stock, locomotives, increasing of the speed of trains.
At present, the Azerbaijani government has reached the first agreement with the World Bank on a loan of $ 450 million. Moreover, a loan agreement on the allocation of $215 million will be signed with the Czech Eximbank in June.
Total project cost the state program for the development of railways is tentatively estimated at 1.252 billion manat.
The government has been cooperating with the ADB since 1999.