ADB loan $500M for Azerbaijan’s road network
MANILA, PHILIPPINES – The Asian Development Bank (ADB), at the request of the Government of Azerbaijan, will help finance a comprehensive road network program that will ensure sustainable economic expansion through increased trade flows and lower transport costs in the country.
The Road Network Development Program 2006-2015, which is estimated to cost $3.4 billion, was developed by Azerbaijan’s Ministry of Transport in July 2006. The program, which includes an investment and non-investment component, aims to develop an adequate, efficient, safe, and sustainable road network.
The investment component of the program involves the construction, upgrade and rehabilitation of about 9,500 kilometers of 124 priority roads. The non-investment component focuses on priority reforms, including the development of regulations and operational procedures, encouraging private sector participation in construction and maintenance, and capacity building for planning, monitoring, evaluation, and reporting.
To help finance the program, ADB will provide a $500 million loan facility that will be available in stages. The first tranche, amounting to $200 million, will fund Project 1 under the Road Network Development Program. Project 1 involves the construction of 59 kilometers of a new expressway between Masalli and Astara on the southern corridor, the rehabilitation of local roads in the project area, the installation of a vehicle weighing station along the new expressway, and project support and capacity building for road network management.
“Connectivity, both domestically and internationally, is the key to sustainable development in Azerbaijan. However, about 70% of the country’s road network is in poor condition, resulting in high transport costs, long delivery periods and traffic accidents,” said Hong Wang, principal transport economist of ADB’s Central and West Asia Department.
The road network of Azerbaijan is inadequate to meet the needs of a rapidly expanding economy. Most roads are in poor condition due to inadequate funding and overloading, which has caused rapid pavement deterioration. The country’s entire road network comprises a total of 25,000 kilometers and is considered the dominant mode of passenger transport and the second major mode of freight transport.
“The road network needs to be developed to spur growth of trade, investment and tourism in Azerbaijan,” said Mr. Wang.