Azerbaijan and World Bank sign agreements on rail mega project

Azerbaijan and World Bank sign agreements on rail mega project

Azerbaijan and the World Bank have accomplished renewal of the draft agreement on Rail Trade and Transport Facilitation Project.


The Azerbaijani government and the World Bank (WB) have accomplished renewal of the draft agreement on Rail Trade and Transport Facilitation Project in connection with transformation of Azerbaijan State Railway Company (Azeri acronym: ADDY) into Azerbaijani Railway CJSC (ADY).

The Baku-based WB resident office reports that today the Azerbaijani government has been submitted an updated version of the draft agreements within the project.

“The renewal touched confirmation of ADY status and change of the implementation dates indicated in the draft agreements,” the WB office emphasized.

Earlier finance minister Samir Sharifov was authorized for signing of a loan agreement with WB and transport minister Ziya Mammadov for signing of project agreement.

"Gerald Olivier supervising the project is to visit Baku from 13 to 17 December. We hope that the package of agreements will be signed in the course of his Baku visit,” the WB office said.

In spring 2008 the WBG Board of Directors endorsed a $450 million loan for Rail Trade and Transport Facilitation Project that has become the WBG biggest one since 1995 when WBG opened financing for Azerbaijan. The loan will be disbursed through International Bank of Reconstruction & Development (IBRD) for 17-year period with 4-year grace term.

The project targets to improve railway services in Azerbaijan, as well as the competitiveness, financial sustainability, operating and cost efficiency and capacity of ADDY. The project with $795 million budget was focused on development of corridor toward to Georgia. 90% of the budget will be directed for transport and 10% for industry and trade.

In spring 2008 ADDY chief engineer Gurban Nazirov said that ADDY intended to upgrade its locomotive fleet and replace equipment fully in this line by buying 50 locomotives as the project stipulates transfer to alternating current when supplying power for Baku – Beyuk Kesik railway line.

Alternating current will allow increase of speed of trains.