Azernews.Az

The Asian Development Bank (ADB) has approved allocation of the second tranche, worth $300 million, to improve water supply and sanitary services in Azerbaijan, according to the ADB's website.

The bank previously planned to approve the loan by the end of 2011, but the approval was postponed merely for technical reasons, as negotiations were successful, the ADB office in Baku told Trend news agency on Thursday.

The loan will be used to complete work on water supply and sanitation system improvements in Agdash, Goychay, Nakhchivan and Beylagan.

The ADB has so far financed two water supply and sanitation projects in Azerbaijan. The first loan, worth $30 million, was allocated in 2004, and envisioned rehabilitation of the water supply system in Goychay and Nakhchivan under a project valued at a total of $39.9 million. That loan period expired on June 30, 2011.

As the cost of the project approved for five years increased and in order to fully cover expenses required for the operations in the mentioned regions, the ADB assigned $75 million under the Multitranche Financing Facility (MFF) as the first tranche, while the government of Azerbaijan allocated $25 million.

The MFF was approved in the amount of $600 million by the ADB board of directors in September 2009. The ADB plans to approve the third, $175 million tranche of the loan on December 31, 2012.

The multi-tranche financing has been the basis of eight-year cooperation between the ADB and the Azerbaijani government.