Finance

Finance

Azerbaijan, World Bank sign new loan agreement

18 December 2009 15:01 (UTC +04:00)

The agreement was signed by Azerbaijanâ€™s Finance Minister Samir Sharifov, Minister of Transport Ziya Mammadov and the WB Country Manager for Azerbaijan, Gregory Jedrzejczak.
The loan, which has a maturity of 23 years with an 8-year grace period (LIBOR +0.25%), will improve railway services in the country, as well as the competitiveness, financial sustainability, operating and cost efficiency, and capacity of the Azerbaijan Railways (ADDY).

The five-year project will target the transport corridor running towards Georgia (East-West corridor).

The total project cost is approximately $1.1 billion.

According to the WB website, the project has four components:

The Rehabilitation of East-West Main Line component will help rehabilitate the track, signaling, and power supply along the east-west corridor. It is expected that some 240 km of mainline track, which is currently in poor condition, will be rehabilitated. Through this investment, it will also be possible to remove the most critical speed restrictions and allow ADDY to handle existing and potential traffic up to 100 km/h for passenger trains and 80 km/h for freight trains without significant track delays on those 240 km. The project will also finance the conversion of the power supply on the East-West corridor to 25 kV.
The New Mainline Locomotives component will finance approximately 50 new mainline electric locomotives to operate on the East-West corridor.
The Modernization component will help to fully implement the International Financial Reporting System (IFRS), provide Advisory services to ADDY to carry out its modernization program, and provide necessary equipment to ADDY to improve its oil spill prevention and response capacity.
The Project Implementation Component will support the Project Implementation Unit.
The Railway Trade and Transport Facilitation Project supports the implementation of the first phase of the 2008-2011 Program of Railway Modernization of the Republic of Azerbaijan. It will focus on the institutional restructuring of the Azerbaijan Railways.