ADB OKs loan worth $ 400M to finance "North-South" project

By  Trend

The Board of Directors of the Asian Development Bank (ADB) approved the granting of a loan for the implementation of the North-South Corridor Project, as well as for the development of the railway sector of Azerbaijan, the bank reported.

The decision was made at the meeting of the Board of Directors on December 1.

$400 million will be issued by ADB itself, and the French Development Agency (FDA) will provide another $ 175 million in co-financing.

Funds from ADB will be allocated in two tranches of $250 million and $150 million, respectively, while the funds of the FDA- in a similar scheme tranches of $ 75 million and $ 00 million. Also, the project provides for the provision of technical assistance in the amount of one million dollars.

Loan will be mainly used as investments in the development of Baku-Yalama railway section (border with Russia) as part of the North-South transport project and as support for expanding the management autonomy of the Azerbaijan Railways CJSC, effective financial restructurization of company’s liabilities, expansion of financial and administrative control, efficiency and accountability of the company, as well as the development of business and corporate restructurization of the railway authority.

Azerbaijan Railways CJSC is considered to be the loan executor.

ADB was founded in 1966 and has 67 member states. The bank’s headquarters is located in Manila, Philippines. Azerbaijan became an ADB member on Dec.22, 1999. The country accounts for 0.5 percent of the bank’s capital.

The International North-South Transport Corridor is meant to connect Northern Europe with Southeast Asia. It will serve as a link connecting the railways of Azerbaijan, Iran and Russia. The corridor is planned to transport 6 million tons of cargo per year at the initial stage and 15-20 million tons of cargo in the future.