Azernews.Az

By Gulgiz Dadashova

The World Bank has approved additional financing for the Rail Trade and Transport Facilitation Project and Integrated Solid Waste Management Project in Azerbaijan.

The WB Board of Executive Directors approved a $220 million loan for the Rail Trade and Transport Facilitation Project, which is aimed to improve railway services, as well as the competitiveness, financial sustainability, operating and cost efficiency, and capacity of Azerbaijan Railways, in particular, along the transport corridor toward Georgia (east-west corridor).

WB Regional Director for the South Caucasus Henry Kerali said that the bank believes that the additional financing will help Azerbaijan consolidate the process of modernization of its railways.

"The reforms and investments in the railway sector to date have already been far-reaching and successful in positioning the railway as an important driver of growth for the country," Kerali said.

Rail transport and transit services are important elements of Azerbaijan's economic diversification strategy with railway services producing revenues equal to 5 percent of non-oil exports of the country in 2012.

By investing in railway infrastructure and operations, Azerbaijan intends to attract an increasing volume of transit in the Central Asia and Black Sea region, thus benefiting from its geographical location as the shortest route between Central Asia and Europe. Also, an oil spill response plan has been completed for the railway and made effective nationwide.

The bank says that the new financing complements the original $450 million World Bank loan. The additional financing will be mostly used for power conversion and upgrading the railway signaling system along the East-West corridor from the Azerbaijani capital Baku to the border with Georgia; the current systems limit traffic to one train per 35 to 40 minutes.

Jacques Bure, WB World Bank Senior Highway Engineer and a leader of the project, said that the new power supply and signaling systems will modernize the operation along Azerbaijan's key transport corridor, allowing trains to run at 8 minute intervals, which will increase the network capacity four-fold.

The WB Executive Directors also approved a $47.1 million loan to Azerbaijan as additional financing for the Integrated Solid Waste Management Project, which is aimed to support the improvement of solid waste disposal management, increase waste collection coverage and enhance waste data information and financial management capacity in the Greater Baku area.

The additional financing will support full rehabilitation of Baku's main waste disposal site in order to extend its lifetime by up to 20 years, and help prepare a national waste management strategy.

Henry Kerali said that the original project has achieved impressive results by closing 80 percent of the informal dump sites in Baku and increasing the percentage of the population served by the formal waste management system by 15 percent.

This additional financing will make the Balakhani landfill a modern waste recycling, recovery and management center, he added.

With a population of almost three million, Greater Baku produces 1.8 million tons of solid waste annually. This amount will likely double in the next 20 years due to rapid demographic growth and higher incomes of Baku residents.

Over the past few years, efforts supported by the WB have visibly improved waste management in Baku by developing a comprehensive vision for the waste management system, setting up institutions responsible for waste management and improving operations of the solid waste landfill.

The additional financing will help fully remediate and close old waste disposal areas, develop new waste cells and introduce methane gas capture systems. It will also help to prepare investments for waste management improvements across the country.

The current World Bank investment portfolio in Azerbaijan includes 17 projects. Since joining the WB, commitments to the country have totaled over $3 billion for 54 projects.