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By Nigar Abbasova

Azerbaijan and the Asian Development Bank intend to strengthen mutual cooperation and move on with the implementation of joint projects.

The issue of bolstering ties was high on agenda during the meeting between President of Azerbaijan Ilham Aliyev and Vice-President of the Asian Development Bank Wencai Zhang on November 14.

The head of state said that Wencai Zhang's visit to the country created a good opportunity for discussing prospects of cooperation and review work done in recent years, underlining new dynamics in cooperation between Azerbaijan and ADB.

Describing Azerbaijan as a reliable partner with financial capabilities, and the country which has always fulfilled its commitments, President Aliyev thanked Wencai Zhang for the important projects which ADB carried out in Azerbaijan, particularly for its supporting the Southern Gas Corridor project, which is of pivotal importance not only to Azerbaijan but to the region in a broader geography, including Europe.

Pointing to Azerbaijan-ADB cooperation in a number of areas, the head of state noted that most of the jointly implemented infrastructure projects have already been realized.

Wencai Zhang, in turn, praised very good cooperation between ADB and Azerbaijan, mentioning that ADB has allocated $2.8 billion to Azerbaijan since the country joined the organization in 1999.

He went on saying that apart from its own projects in Azerbaijan, ADB also supports and attaches importance to Southern Gas Corridor and Shah Deniz projects, adding that a special council was set up at the ADB to deal with these projects.

The sides also emphasized the importance of the ADB-supported infrastructure projects in Azerbaijan, including North-South railroad corridor, water supply, road expansion and other projects.

Energy projects

Azerbaijan may see the finance institute among the main lenders in the implementation of such projects as the development of gas condensate field Shah Deniz Stage 2 and Southern Gas Corridor. The projects are included in the ADB's 2017-2019 country operations business plan for Azerbaijan.

Speaking at a press conference in Baku Zhang said that the Board of Directors of the bank will discuss allocation of a loan for the SGC project until late 2016.

The SGC project, which aims at the diversification of the EU gas supply sources and routes was also discussed during a meeting between Finance Minister Samir Sharifov and ADB Vice-President.

The loan may finance the SGC that includes the development of giant Shah Deniz 2 field and building a chain of export pipelines for gas supply to Europe. The loan may be provided on an annual base with separate tranches to the Southern Gas Corridor Company (SGCC) as the government agent for developing Shah Deniz 2 and export pipelines.

SGC project envisages transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian Sea region to Europe through Georgia and Turkey.

Separately, ADB is also considering Shah Deniz Gas Field Expansion Project, which has a proposed status, and expected to support the government's ongoing investment in the development of the project.

The project aims to improve Azerbaijan's fiscal position by increasing revenues through the export of natural gas from the expanded Shah Deniz natural gas production and processing facility and the creation of additional domestic employment.

Transport projects

Zhang also held a meeting with Azerbaijan Railways CJSC (ADY) head Javid Gurbanov, where the sides discussed the implementation of projects on the international transport corridors passing through Azerbaijan, as well as the long-term tasks.

Gurbanov informed Zhang about the reforms and activities carried out for reconstruction of the infrastructure of Azerbaijan’s railways. The sides also discussed medium-term prospects and priorities of cooperation, as well as further expansion of cooperation.

The bank will consider allocating a $200-million loan for the implementation of the International North-South Transportation Corridor. The management of the institution will review the project on April 15, 2017.

If approved, the funds are expected to be mainly spent for the development of Baku-Yalama (border with Russia) rail line, which is implemented within the framework of the North-South project.

Allocation of funds for the realization of the North-South project is envisaged within the ADB’s railway sector development program. Azerbaijan Railways CJSC is the executing agency for obtaining the loan.

Potential spheres of interaction

Addressing the press conference Zhang said that ADB intends to consider new potential spheres to expand cooperation with Azerbaijan.

Along with traditional spheres, the bank also plans to render its assistance to the implementation of institutional reforms, and projects in the sphere of ICT, renewable sources of energy and professional education.

Azerbaijan became a member of ADB in 1999 while the country’s share in the bank’s capital amounts to 0.5 percent. Other proposed ADB projects in Azerbaijan include renewable energy development project (biomass cogeneration), and solid waste management project for intermediary cities.

Country Partnership Strategy of the bank for Azerbaijan, which covers 2014-2018 aims to diversify the economy, foster new economic opportunities, and reduce disparities between urban and rural areas, while a huge emphasis is placed on the development of the transport sector in the country.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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