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EBRD unveils major project for further modernisation of roads in Azerbaijan

By Anthony Williams

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The EBRD has launched an important series of investments to support the further modernisation of Azerbaijan’s road infrastructure with financing that will promote regional trade links and drive forward the diversification of the country’s economy.

This latest EBRD loan for the roads system in the country provides US$ 250 million to the Azerbaijani authorities for the reconstruction of key regional roads feeding into the main corridor highways. It could be a precursor to two more investments of the same magnitude for total funding for the sector of US$ 750 million.

The rehabilitation of these regional roads aims to ensure effective transport links from the country’s regions into the core corridors and also supports the government’s strategy to support economic diversification, especially targeting the non-oil sectors of the economy.

The US$ 250 million loan from the EBRD is linked to initiatives to improve key areas such as road maintenance, the development of an effective tolling strategy and general enhancements in transportation safety and efficiency. Successful implementation of these initiatives will be key to the roll-out of similar road investments in the future which will be subject to separate approval by the EBRD Board of Directors.

Signing the agreement with the Azerbaijani authorities, Olivier Descamps, the EBRD’s Managing Director for Turkey, Eastern Europe, Caucasus and Central Asia, said: “EBRD funding for the regional road improvements is essential to reaching out to the more remote areas of the country to help promote more diverse and more sustainable economic development.”

The new loan will be used specifically to finance the reconstruction of the Mingachevir – Bahramtapa road. The European Union’s Neighbourhood Investment Facility is supporting the project with a €3.4 million grant

The modernisation of this 156 km stretch will improve transport links for some half a million people living in this rural area and provide access to the main international highway that runs between the Azerbaijani capital of Baku and the Georgian border.

The EBRD has long been involved in the all-important roads sector in Azerbaijan, providing an initial loan in 2004 that helped to rebuild the main road running from Hajigabul in the western part of the country to Kurdamir, located on the “Silk Road,” the historic trading route between Asia and Europe.

The Bank’s latest involvement in the regional roads sector will complement the work that is continuing to refurbish the key corridors and which is being financed by the World Bank and the Asian Development Bank.

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