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EBRD financing boosts Azeri infrastructure
The European Bank for Reconstruction and Development (EBRD) is investing US$ 36.4 million (EUR 34.2 million) in two infrastructure projects in Azerbaijan. A US$ 20.2 million (EUR 19.2 million) loan will assist Azerbaijan State Railways in financing a programme of infrastructure improvements to the Azeri section of the trans-Caucasian railway. Complementing this investment, a loan of US$ 16.2 million (EUR 15.0 million) to Baku International Sea Trading Port will be used to finance the modernisation of the ferry terminal at Baku port.
"The projects have wider implications for the region as a whole, as all the Central Asian economies will benefit through the development of an effective southern trade corridor to Europe," said Roy Knighton, Head of the EBRD’s Transport Team. He added: "The involvement of the EBRD in these projects is crucial, as it provides the Azerbaijan State Railways and Baku Port with much-needed financing for these long-term investments."
Both projects support the transport corridor linking eastern Europe, the Caucasus and Central Asia (TRACECA) and introduce measures that will reform the transport sector. The trans-Caucasian railway is of strategic importance since it provides the key link between the Caspian and Black Seas, and connects the landlocked countries of Azerbaijan, Armenia and Central Asia to Europe. Major commodities transported on this route include crude oil from the Tengiz oil field in Kazakhstan, oil products for the local state-owned oil company and cotton from Uzbekistan. Oil and oil products make up about 60 per cent of all commodities carried on this route. Furthermore, the upgrading of a washing station for tank wagons will improve the efficiency and environmental management of the oil tanker wagon fleet.
Both projects include measures to improve the operational performance of the two companies. These include the introduction of a five-year business planning process and improved financial management and accounting.
The two projects have been developed in close cooperation with the European Community. The EU-Tacis programme has provided grant co-financing for a fibre optic communications link to run parallel to the trans-Caucasian line and for the introduction of container-handling capability at Baku port. In addition, Tacis has provided considerable financing for consultancy services to assist with project preparation.
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