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WB approves financing of $53.25 million agricultural project in Azerbaijan

2 October 2013 16:45 (UTC+04:00)
WB approves financing of $53.25 million agricultural project in Azerbaijan

By Nigar Orujova

The Board of Directors of the World Bank (WB) has approved some $53.25 million Agricultural Competitiveness Improvement Project in Azerbaijan, the head of WB's Baku office Larisa Leshchenko told Trend news agency on October 2.

The project aims to facilitate access to markets for agricultural producers by improving sanitary and phytosanitary services, and to provide financial services to agricultural enterprises.

According to Leshchenko, $34.5 million of the total cost will be allocated by the WB. The project will be financed through the International Bank for Reconstruction and Development (IBRD).

The project will contribute to the further development of agribusiness and the food industry through the provision of loans for the improvement of technology, increase of production volume and the modernization of 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.

Implementation of the second phase of the adapted program of development and agricultural lending in Azerbaijan, the loan agreement for which was signed in the autumn of 2006, was completed in February. This project served to increasing the income of farmers and agricultural productivity.

The second project "Azerbaijan Rural Investment" (AzRIP-2) entered into force in 2012 end. This project is based on the results of the first project, which has helped to increase revenues of 600,000 farmers, improve irrigation services for 700,000 people and provide quality drinking water to 150 villagers.

This project will cover five main areas - plain Shirvan, Mugan-Salyan, Nakhchivan, the northern and northwestern regions.

According to Leshchenko, some 1.2 million people in Azerbaijan got access to good roads thanks to the implementation of WB projects.

According to her, some 180,000-200,000 people directly benefited from the projects in the water supply area.

"Currently we continue the implementation of projects in this sphere. Of course, these figures will significantly increase as a result of implementation of the planned projects," she said.

In addition, nearly 50,000 farmers got access to loan resources.

"Today one of the constraints for business including in the sphere of agriculture, is poor access to financial resources. Thanks to loans, farmers were able to develop their businesses and at the same time increase their income," Leshchenko said.

According to her, some 200,000 residents of Sheki and Agdash will get access to more qualitative services in healthcare and 8,000 teachers were trained in new teaching methods.

"The aid programme to IDPs plays a very important role, " she said. "About 200,000 IDPs got more qualitative housing and water. Currently our new project is aimed at assisting the development of their businesses so these people wouldn't depend on social assistance, but have their own job, small business and own income."

Over $3 billion worth of over 50 projects were financed by the WB since Azerbaijan joined it in 1992.

The level of application of funds under the WB projects in Azerbaijan is one of the best in the region, Leshchenko believes. The funds expenditure at 20-25 percent level is considered as a very good result.

"Most difficulties with the expenditure of the funds have already been overcome. During the past fiscal year, which ended in late June, the level of funds application reached 22.4 percent. Last year, the figure made up 13.8 percent, and the previous year was eight percent. We see a tremendous progress," she said.

In 2012, Azerbaijan spent $393.4 million from the WB allocated funds. In addition to these loans, the WB allocated 44 grants totaling $41.37 million for Azerbaijan in 1995-2012.

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