ADB ready to finance development of Azerbaijan’s railways in case of availability of investment project for them
09.03.2010 (15:32)
Asian Development Bank (ADB) has curtailed a program of technical assistance to the Azerbaijani government in railway development.The Baku-based ADB resident office informs that ADB has taken a pause in co-operation with Azerbaijan State Railways (Azeri acronym: ADY – Azerbaijan Demir Yollari) as their technical assistance failed to finish by development of an investment project.
“We are ready to return to co-operation with ADY when it wishes and in case it make a relevant investment project,” the ADB office said.
Earlier the consultants drawn by the Bank completed successfully the first stage of technical assistance to preparation of Multitranche Financing Facility on Preparing the Railways Sector Development Program.
It was carried out assessment of the current condition of railway sector and a relevant report was submitted to the government.
The Bank expected result of its technical assistance by the end of 2009, but ADY restructuring carried out in summer made its correctives.
Earlier the ADB Board of Directors approved a $1 million grant to be disbursed for the Government of Azerbaijan within Preparing the Railways Sector Development Program.
Before the government and ADB achieved a principal agreement on a $550 million loan for Azerbaijan State Railway Company (ADDY), on the basis of which ADY was established.
Preliminarily the parties agreed that ADB will prepare a project for ADY upgrade on north-south segment (from the border of Azerbaijan with Russia to the border with Iran). But ADB was also ready to fund any works within State Railway Development Programme.
The Bank is ready to sponsor operations under Multitranche Financing Facility (MFF) scheme.
The Ministries of Transport, of Finance and of Economic Development of Azerbaijan were commissioned to work over all proposals jointly, select the most attractive ones and propose a joint initiative to the government.
The Azerbaijani government is examining investors for reconstruction of railway tracks via Russia-Baku-border with Iran (North-South transport corridor) within State Railway Development Program 2008-12. The European Bank of Reconstruction and Development (EBRD) and Asian Development Bank are to ready to finance this project. Both EBRD and ADB are ready to finance by $500 million for these ends. EBRD is going to give funds jointly with European Investment Bank (EIB) with $500 million and German bank KfW.
The railway segment of West-East corridor will be financed by World Bank Group ($450 million) and as it is expected by Japanese Bank for International Development ($260 million). German bank KfW is ready to fund renewal of rolling stock of Azerbaijan State Railway Company (ADDY).
The State Program is estimated at AZN 1.2 bn (more than $1.5 bn).
www.abc.az
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