World Bank developing new agricultural project for Azerbaijan
By Nigar Orujova
The World Bank is developing a new project in the agriculture sector of Azerbaijan, the Baku office of the bank said on Wednesday.
"The Agricultural Competitiveness Improvement Project is designed to facilitate agricultural producers' access to markets by improving sanitary and phytosanitary services, providing financial services to agricultural enterprises and so on. The project will contribute to the further development of the agricultural business and the food industry by providing credits for improving technologies, increasing production volume, modernizing phytosanitary and veterinary services. The project will also contribute to the improvement of the regulatory and institutional framework in the field of food safety and quality," the World Bank said.
Formal negotiations on the project between Azerbaijan's government and the WB may start in the first half of this year.
"We need a project that will examine the entire chain from the producer to the consumer indicating all the shortcomings of this chain," the Azerbaijani government said.
The WB completed the second phase of the program on the development and crediting of agriculture in Azerbaijan in February, and a relevant loan agreement was signed in fall 2006. This project served to the increase of farmers' revenues and agricultural productivity.
Azerbaijan Rural Investment Project (AzRIP-2) came into force at the end of last year. It is based on the results of the first such project, which had increased the incomes of 600,000 farmers and improved irrigation services for 700,000 people, providing 150 villagers with quality drinking water. The project will cover five main areas of the plain Shirvan, Mugan-Salyan, Nakhchivan, and the northern and northwestern regions of the country.
Water supply project
The WB also said it had extended the term of the National Water Supply and Sanitation Project of Azerbaijan until the end of 2014.
"As part of the restructuring, it was decided to prolong the life of the first project until the completion of the bank's second water project in the country. At present, the bank is also awaiting an official request from the government of Azerbaijan for the provision of additional funding, as there is a shortage of financial resources for the project," the WB office said.
A source in the government has said an appeal for additional funding in the amount of over $100 million from the International Bank for Reconstruction and Development -- part of the WB -- has already been made.
The first WB water supply project envisions complete restoration of the water supply and sewer system in the Shamakhi, Gabala, Saatli and Sabirabad regions. As a result of changing the design of the project, a need for additional resources was revealed for the last three regions.
Additional funding is required to repair the wastewater runoff facilities and construct a water pipe originating from the Kura treatment plant, which will provide the Gabala, Saatli and Sabirabad regions with drinking water. The country's water operator has already announced a tender for the construction of a water main from the Kura complex of water treatment facilities in the Hajigabul region to the Sabirabad and Saatli regions.
The WB allocated $230 million for the first water supply project with a total cost of $310 million, while the government disbursed $80 million to finance the project. Initially, the project included 22 regions, but their number was reduced to four as a result of an overhaul.
The WB, which is also implementing an integrated solid waste management project in Azerbaijan, is due to approve additional funding worth $40 million for the project on May 30.
The current strategy of the WB's cooperation with Azerbaijan covers the period 2011-2014. It is based on such priorities as boosting the non-oil sector of the economy, including development of infrastructure and agriculture. In addition, the bank's activities are also focused on improving the effectiveness of social services, including health, education, social security and water supply.
Currently the WB is working with the Azerbaijani government in two areas - the development of new projects and stepping up work under the existing project portfolio.
Since establishing cooperation with Azerbaijan in 1992, the World Bank has financed 56 projects in various sectors of the economy for a total of $3.4 billion in loans and grants of the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD). During this period, the WB has allocated $42 million to Azerbaijan for the development of projects and feasibility studies and the organization of training.