The EBRD is lending Azerbaijan US$41mn to help reconstruct more than 85km of road that will help promote trade and regional cooperation between the countries of Central Asia and the Caucasus.
The 15-year loan will help rebuild the main road running from Hajigabul in the western part of the country to Kurdamir, located on the “Silk Road ‘, the historic trading route between Asia and Europe. A 10km by-pass at Kurdamir will also be built under the project.
Raymond Conway, head of the EBRD’s office in Azerbaijan, says one of the main issues facing Azerbaijan’s road sector is inadequate funding. Many of the country’s networks have been neglected, leaving roads that are difficult to travel along, damage users “vehicles and inhibit trade. This project should address these issues by reconstructing what is an important part of a trade route both within Azerbaijan and with its neighbours.
The project will be undertaken by the Road Transport Services Department (RTSD), part of the Ministry of Transport, charged with the management of Azerbaijan’s road system. Part of the loan will be used to promote institutional reform at RTSD, such as increasing customer focus. A key condition, for example, is to set up a “road board “represented by at least 50% of road users to advise on all aspects of road policy and management.
The loan comes on the back of the government’s commitment to rehabilitate key corridors across the country. Whilst this project focuses on a portion of the East-West Silk Road – which runs for about 900km between the Caspian and the Black Seas – the government is also expected to give priority to the North-South route to Russia. Conway says it is encouraging to see the government’s commitment to reforming the country’s roads, a sector so crucial for traders, tourists, local citizens and for regional cooperation. The EBRD is willing to consider future such projects because of their importance to the country and region.
The EBRD is one of the largest investors in Azerbaijan, having committed more than €
385mn in projects ranging from natural resources to transport to supporting the growth of entrepreneurship, the foundation of any market economy. Working with its many partners, the Bank has supported around 30 projects across the country, worth more than €
6.6bn.