Azernews.Az

By Aynur Jafarova

The Asian Development Bank (ADB) is planning to allocate a new loan for project on construction of a new road in Azerbaijan.

The plan is part of a new multi-trance financing for road construction (MFF) in Azerbaijan during 2014 known as Second Road Network Development Investment Program.

According to ADB's business plan for Azerbaijan fixed for the next two years, the bank intends to allocated about $150 million for the project.

The total cost of the new road project will be $200 million, some $50 million of which will be paid by Azerbaijan.

The second multi-tranche package for the construction of roads was approved in November 2012 with the sum of $500 million. The program envisages the construction of the Masalli-Shorsulu highway to a length of 63 kilometers, consisting of two parts: Masalli-Jalilabad (32.2 kilometers) and Jalilabad-Shorsulu (over 30 kilometers)

The cost of the project is $625 million, $125 million of which will be provided by the country's government.

Within the first tranche, the ADB allocated $250 million to construct a four-lane Masalli-Jalilabad road. The total cost of the project amounted to $312 million, $62 million of which was provided by the Azerbaijani government. The loan agreement was signed in April 2013.

The ADB plans to issue a third tranche worth $100 million in 2016. The total cost of the project will be equal to $133 million of which $33 million will be financed by Azerbaijan.

Also, ADB intends to assist Azerbaijan to develop a legal ground for participation of the private sector in the electric power sector. Technical assistance worth $500,000 will be allocated in 2014.

ADB predicts by 2020, 99.9 percent of the Azerbaijani population will have access to electric power. By 2018, the consumption of electricity per capita will increase to 2,500 kilowatt / hours and the total cost of the purchase of electricity will reach $900 million. Gas emission into the atmosphere will be reduced by 24,000 tons.

ADB also intends to allocate $40 million to the country for the development of alternative and resumed sources of energy in 2015. This fund will be invested in the implementation of two pilot projects on processing of biomasses with the capacity of 16 megawatts for the effective supply of electricity and heat to Oguz and Agjabedi.

The bank is ready to allocate the first loan within the framework of the Power Distribution Investment Program for the development of distribution of electric power in Azerbaijan in 2015 or sooner.

The total cost of the project is $133 million. ADB will allocate $100 million while $33 million will be provided by Azerbaijan.

Established in 1966, the ADB is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. The bank is owned by 67 members, including 48 from the region. In 2012, ADB's assistance totaled $21.6 billion, including co-financing $8.3 billion.

Azerbaijan's share in the bank's capital is 0.5 percent.