WB, Azerbaijan agree on additional $47 million allotment

By AzerNews

The World Bank (WB) and the Azerbaijani government signed a protocol on the results of official negotiations on issues related to additional funding for the Integrated Solid Waste Management Project, the Baku office of the bank reported on May 13.

The protocol will be submitted to the Board of Directors. Loan approval by the Board of Directors is scheduled for May 30.

Under the additional financing, the WB plans to allocate $47.1 million of credit resources from the International Bank for Reconstruction and Development, which is a part of the WB, while the share of the country's government will be about $8 million.

The major portion of the bank's credit resources will focus on the reconstruction of the solid waste landfill in Balakhany, covering additional expenses for project management, as well as work on technical preparations for future investment in the sector.

The project is planned to close on September 30, 2013. However, it is expected to extend the project for three years until 30 September 2016 to complete the works under the additional financing of the project.

The Solid Waste Management Project was approved by the WB's Board of Directors in June 2008. A relevant loan agreement between the bank and Azerbaijan was signed on May 20, 2009. The total project cost is $41.5 million of which $29.5 million falls to the WB's 20-year loan and the rest is funded by the government of Azerbaijan.

Project activities are implemented in the following areas: institutional reform, capacity building and management, regulation and management of the Balakhani solid waste landfill, closure of other dumps and management, purchase of equipment for the solid waste collection, preparation of an investment plan for the period after the completion of the project.

According to research conducted by the WB and Economic Development Ministry, the annual solid waste volume in Baku is 350 kilograms per capita.

The Azerbaijani capital is home to about one-fourth of the country's total population of nine million, and landfills cannot receive solid waste of the growing population forever. Moreover, the growing city cannot afford wasting such large territories to collect garbage, which would be dangerous for nearby residents.

To escape the waste problem the Solid Waste Sorting Plant and Baku Solid Waste Incineration Plant were launched in Azerbaijan in December 2012.

The plant is expected to develop recycling business in the country and will annually receive about 200,000 tons of solid waste, including glass, plastic, paper and colored metal. Residue from the process will be an inert clinker, which could be used as a construction material.

The incinerator will be an alternative source of energy production. It will be able to produce 231.5 million kilowatts per year, which is enough to provide 50,000 households with electricity.

Since establishing cooperation with Azerbaijan in 1992, the World Bank has financed 56 projects in various sectors of the economy for a total of $3.4 billion in loans and grants of the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD). During this period, the WB has allocated $42 million to Azerbaijan for the development of projects and feasibility studies and the organization of training.