OREANDA-NEWS. June 08, 2009. The World Bank Group’s Board of Directors has been submitted a project of second extra financing for Azerbaijan Highway Project II.

The Baku-based WB representative office informs that they have completed official negotiations with the Azerbaijani government and entire documentation on the project was submitted to the WBG Board of Directors.

“The project is oriented to reconstruction of Hajigabul-Bahramtepe highway and 200 km of secondary roads. Until 1st July 2009 the Board of Directors is expected to endorse mixed financing in the total amount of USD 175 million – in accord with standards of the International Bank for Reconstruction & Development (IBRD) and the International Development Association (IDA). The IBRD is likely to finance USD 113 million and IDA USD 62 million,” a government source said.

Negotiations on the project finished in May.

In April Baku WB specialist Jacques Kure following Baku consultations confirmed Bank’s readiness to approve in 2009 fiscal year (it finishes on 1st July 2009) the loan for reconstruction of Hajigabul—Bahramtepe highway.

A loan for reconstruction of second part Baku-Shemakha can be considered in two months after that. The loan for Hajigabul—Bahramtepe road project is estimated currently at \\$63 million and finances for its can be funded through the IDA and IBRD.

Sequence in consideration of projects is linked with WB procedures envisaging public discussion of a project of social character 120 days before its consideration by the WB Board of Directors.

Earlier the Azerbaijani government stated readiness to raise financing from WBG for expansion of Baku-Shemakha highway (it is under reconstruction at the expense of a WB loan).

Additional financing is intended for expansion of the highway from two up to four lanes. The government was ready for raising up to USD 50 million from the Bank.

Feasibility study on project works will be made by company Scott Wilson. The loan can be received until 1 July 2009.

In 2008 fiscal year the Bank approved \\$300 million of extra financing for Highway Project II for further works on reconstruction of Alat-Astara highway and construction of a by-pass road between the Tagiyev and Sahil settlements nearby Baku.

Highway Project II, for which the IBRD financed a USD 200 million loan, included reconstruction of Alat-Astara and Baku-Shamakha highways, but USD 35 million of the loan was re-directed for reconstruction of Kurdamir-Ujar highway.