Finance

Finance

ADB allocates new loan to Azerbaijan

06 June 2012 09:58 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. The Asian Development Bank (ADB) and the Government of Azerbaijan today signed a $300 miilion second tranche loan under the $600 million Multi-trance Financing Facility (MFF) for the Water Supply and Sanitation Investment Program. The signing took place in the center of the Nakhchivan Autonomous Republic and the largest project town under the MFF Program.

The second tranche funds will reconstruct and build water and sewage infrastructure, expand the planning, technical and financial management capabilities of oversight agencies in the towns of Agdash, Beylagan, Goychay, and Nakhchivan. The loan will also finance capacity building activities to ensure efficient and financially viable long-term operations.

ADB’s loan has a 24-year term with a 4-year grace period and interest set according to its LIBOR-based lending facility. The Government of Azerbaijan is providing $110 million. The State Amelioration and Water Management Committee of the Nakhcivan Autonomous Republic will act as the executing agency (EA) for the project activities in the of town Nakhcivan, and Azersu Open Joint Stock Company will serve as the EA for other project towns.

The investment program will improve the quality, coverage, and continuity of the water and sanitation services for about 500,000 people in the towns of Agdash, Agjabedi, Balakan, Beylagan, Goychay, and Nakchivan. The new loan is part of the MFF for rehabilitating the water supply and sanitation in Azerbaijanâ€™s secondary towns approved by ADB Board of Directors in 2009. The first loan of $75 million under the facility was also approved in 2009. Previously, ADB approved a $30 million for the sector in 2004.
"This is the largest loan amount approved by ADB for Azerbaijan, marking a new milestone in our successful cooperation. This is also the first time the signing ceremony takes place in a beneficiary project town itself, and in this context, we are very proud of ADBâ€™s contribution to the economic and social development of Azerbaijanâ€™s regional townsâ€, says Olly Norojono, ADB Resident Representative in Azerbaijan. â€œThe second tranche of the investment program will complete the rehabilitation of physical infrastructure in four project towns, including the city of Nakhchivan, and also provide non-physical investment for institutional capacity building. Overall, within a short period of time, we will see the people in all project towns enjoying continuous access to high quality water supply and sanitation services being a direct outcome of our investment programâ€.