OREANDA-NEWS. April 23, 2009. World Bank Group (WBG) has sent to Azerbaijan a mission for Rail Trade and Transport Facilitation Project approved on 27 March 2008 by the WBG Board of Directors and focused on assistance to Azerbaijan State Railway (ADDY).

The Baku-based WBG representative office reports that the Marta Lorenz mission is due to last until 25 April.

“She will hold consultations with the Azerbaijani party on the situation around the project,” the WBG office said.

Azerbaijani President Ilham Aliyev has already sanctioned vesting of powers for signing of the loan agreement on the Project.

Earlier it was indicated that the loan issue should be coordinated with approval of Azerbaijan State Railway Development Programme.

The Programme that initially was supposed to cover 2008-12 is in the process of correction now.

The USD 450 million loan for Rail Trade and Transport Facilitation Project 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 aims to improve railway services in Azerbaijan, as well as the competitiveness, financial sustainability, operating and cost efficiency, and capacity of Azerbaijan Railway - ADDY- in particular along the transport corridor toward Georgia (east-west corridor). 90% of the USD 795 million loan project will be directed for transport and 10% for industry and trade.

In spring 2008 ADDY chief engineer Gurban Nazirov said that ADDY will have to upgrade its locomotive fleet as the project stipulates transfer to alternating current when supplying power for Baku – Beyuk Kesik railway line.

Whole documentation on the Project, including the final protocol of negotiations and the draft loan agreement, have been submitted for consideration of the President’s Executive Office.

After their approval the President’s Office will empower signing of the agreement with WBG,” the source said.

Empowering for signing is scheduled preliminarily for summer. Not expecting legalization of the Project, it was announced a tender procedure for technical consultant to replace power base along Baku-Beyuk Kesik railway, renew signs system and purchase locomotives for ADDY.