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EBRD supports development of transport link between Caucasus and Central Asia
Development of the transport corridor linking eastern Europe, the Caucasus and Central Asia (TRACECA) has received further support from the European Bank for Reconstruction and Development (EBRD). To agree the project, high-ranking EBRD officials will visit Baku from 15 to 18 June 1999. Noreen Doyle, Deputy Vice President Finance, Olivier Descamps, Team Director for Azerbaijan, and Vittorio Jucker, Natural Resources Director, will meet relevant government officials, private business partners and representatives of Baku’s diplomatic community.
"We see this route as a viable and strategically important artery in the development of trade and in the integration of this region with the rest of the world," said Olivier Descamps on the eve of the trip. "The EBRD is committed to supporting the TRACECA corridor with substantial funding, provided that the respective governments are committed to this project."
In Azerbaijan projects under way cover infrastructure improvements to the trans-Caucasian rail link, forming part of the TRACECA corridor, the upgrading of Baku port and improvements to an 80 km section of road on the TRACECA route. An EBRD loan for improving the Georgian rail section of the corridor was signed at the end of last year and it is expected that negotiations with the Azeri Government, for the port and rail projects, will follow shortly, thus concluding the initial programme of investment for the trans-Caucasian corridor.
Presently the EBRD is involved in 15 transport operations in the area of the corridor, totalling US$ 850 million (EUR 793 million) in project costs and stretching all the way from Georgia to Kazakhstan, covering rail, road and ports. These include upgrading of the road from Ashgabat to Mary, improvements to the railway systems in Uzbekistan and Kazakhstan and the upgrading of Aktau and Turkmenbashi ports. Five projects cover the trans-Caucasian corridor to facilitate the flow of goods between Baku in Azerbaijan and the Black Sea ports of Poti and Batumi.
"These transport projects are predominantly in the public sector," Mr Descamps stressed. "Sizeable transport infrastructure projects would continue to be executed by public sector agencies. These are heavily dependent on government policies, and private commercial finance is not yet available."
The EBRD’s loans have mobilised substantial additional funding and have helped to encourage commercial discipline and to increase cost recovery. They have also enhanced the self-financing capacity of public institutions and have encouraged transparency in public procurement.
The transport sector is a priority for the EBRD. To date, it has accounted for EUR 1.5 billion of commitments, which represents 13 per cent of the total funding of the EBRD in its region of operations.
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