Azerbaijan, ADB ink loan deal
By Nigar Abbasova
Azerbaijan’s Azerishig OJSC and the Asian Development Bank (ADB) have signed an agreement on allocation of the bank loan’s first tranche to improve the power distribution system in Azerbaijan, ADB Baku office told Trend on July 27.
The agreement has been signed by Azerishig head Baba Rzayev and ADB country director in Azerbaijan, Nariman Mannapbekov. The amount of the first tranche of the loan, which has been allocated for 25 years, is $250 million.
Rate of interest will be formed on the basis of London interbank rate (LIBOR) with low level of margin of 0.4 percent.
The funds are expected to be directed to the purchase of necessary equipment in substations as well as purchase of meters for the population of the country. ADB signed a guarantee agreement with Azerbaijan as the state is a guarantor of a debt.
The first tranche investment activities scheduled to run from mid-2016 to the end of 2018.
ADB Central and West Asia Department director general Sean O'Sullivan earlier said that the program will help to provide round-the-clock and reliable electricity to households and entities in secondary cities and rural areas in Azerbaijan.
ADB and Azerbaijan have signed a memo on the mutual understanding on the investment program worth of $1 billion in May 2015, the document envisages reconstruction and modernization of the country’s power supply system.
The investment program project envisages allocation of funds with the amount of $750 million in 3 stages ($250 million in each stage), another $250 million will be provided by the government of Azerbaijan.
Azerbaijan has become a member in 1999, the country’s share in the bank’s capital amounts to 0.5 percent.
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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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