Azernews.Az

The Asian Development Bank (ADB) will allocate $75 million under a project aiming to improve water supply and sanitation services in Azerbaijan’s Nakhchivan and Goychay regions, according to an agreement signed with the government in Baku on Thursday. The allocation is the first batch of the ADB’s Multitranche Financing Facility (MFF).
The total MFF lending for Azerbaijan’s water economy was approved by the bank’s board of directors in September at the level of $600 million.
The Director of Urban Services for ADB’s Central and West Asia Department, Matthew Westfall, is in Baku for the signing.
The first tranche will be spent on operations in the two regions, though it was previously expected to cover three regions of the country. Since these funds suffice to fully finance the work in two regions -- including $25m to be provided by the government -- the scope of the activities is likely to be expanded during the allocation of further tranches, which will be larger, the ADB representation said.
According to the signed loan covenant, the first tranche is being allotted for 24 years, with a four-year grace period and LIBOR+0.2% annual interest rate.
Multi-tranche financing will be the basis for the bank’s eight-year cooperation with the Azerbaijani government, considering the phased investment underpinned by a clear-cut strategy and a program on reforming the domestic water supply and sewer systems.
The second tranche of the loan will be aimed at expanding coverage of the project into four more towns – Agdash, Agjabadi, Beylagan and Balakan.
The third tranche seeks to create a centralized water supply and sewer system around the capital Baku.*