The FINANCIAL — The Asian Development Bank’s (ADB) Board of Directors has approved two loans totaling $400 million to help strengthen Azerbaijan’s railway sector and modernize and rehabilitate the Sumgayit-Yalama rail line, a key link in the North-South Railway Corridor.
ADB will provide $250 million as a policy-based loan to improve rail service in the country through a series of reforms that will improve governance and financial management of Azerbaijan Railways. Another $150 million will be provided to rehabilitate 166 kilometers (km) of double-line main track on the North-South Railway Corridor, which connects Azerbaijan with the Russian Federation in the north and the Islamic Republic of Iran in the south, according to ADB.
“Modernizing Azerbaijan’s rail transport system is a critical component in the government’s efforts to diversify the economy and strengthen regional cooperation and trade,” said Sean O’Sullivan, Director General of ADB’s Central and West Asia Department. “Reforms to Azerbaijan Railways and the support to the North-South Railway Corridor will help put Azerbaijan Railways on a sustainable growth path, improve services, and attract greater traffic with the improvement of an important regional transport link.”
Upgrading and modernizing rail service in Azerbaijan will enable the country to capitalize on the country’s strategic location and provide safer, more energy-efficient, cheaper, and less road-intensive transport. Reform of the rail sector is a key component of the government’s roadmap to promote logistics and trade in the country.
ADB’s support to Azerbaijan Railways is part of the government’s comprehensive policy and fiscal response to promote better corporate and financial management in the sector, while making crucial financing available to upgrade service and competitiveness along key corridors. Under the program, Azerbaijan Railways will also undertake reforms to better manage its debt load, improve financial reporting, and rationalize its human resources policies.
As of 5 December, Azerbaijan has received grants and loans amounting to $4.1 billion since joining ADB in 1998. ADB’s core ongoing operations in Azerbaijan include support for transport, energy, urban infrastructure, and the private sector, and technical assistance and programs in various areas, including knowledge sharing of best international practices on finance, education, governance, and economic development. ADB will continue to work with Azerbaijan and other development partners to promote cross-border links within the Central Asia Regional Economic Cooperation (CAREC) Program.