OREANDA-NEWS. June 18, 2009.  The World Bank confirmed its readiness to expand financing for Urban Water Supply & Sanitation Project in Azerbaijan.

Azerbaijani Government informed Fineko/abc.az that the Bank gave preliminary agreement to expand financing of these projects.

“As soon as the progress is seen the financing will be expanded. As regards this direction, the works are about to start in 8 regions of the country. Plus, documentation for 10 more regions is developed,” the Government indicated. Extra financing estimates are still unknown.

“It was agreed that if the progress is seen, the Government will assess current deficit of funds and apply to the Bank explaining extra financing required.” the Government said.

Earlier Gregory T. Jedrzejczak, Country Manager of World Bank/Azerbaijan, said in fiscal year of 2010 the Bank could approve an extra financing for this earlier approved programme.

“The expansion is linked with growth of expenditures, but extra financing evaluation is not over yet,” Jedrzejczak noted.

Earlier Bank approved disbursal of USD420 million for the works at the total cost of USD560 million in 43 regions of the country. The Bank counted on USD12-15 million per region, but factual expenditures were higher.

Under the 2nd project WBG is to finance USD190 million, including USD160 million through International Bank of Reconstruction and Development (IBRD) and USD30 million through International Development Association (IDA).  The Azerbaijani party will finance another USD60 million.

Project II will cover 5 regions in the Nakhchivan Autonomous Republic, 6 regions in the south of Azerbaijan and another 10 regions not covered by watersupply modernization project.

The credit agreement on Project I was signed on August 17. In period until 2012 WBG endorsed disbursal of a USD230 million credit through the International Bank for Reconstruction & Development for the USD310 million watersupply project in small cities of Azerbaijan. The project consists of three components: regional investment policy (20 regions), regional development plan for Greater Baku, upgrade of infrastructure and structural changes in project loan borrower Azersu (Azerbaijan State Water Company). Originally the project covered Agstafa, Bilasuvar, Geranboy, Gabala, Guba, Khanlar, Oguz, Saatly, Tovuz, Zagatala, Hajigabul, Gagh, Mingachevir, Samukh, Shamkir, Terter, Gazagh, Sabirabad and Sharur and Babek regions of the Nakhchivan Autonomous Republic. Then Shemakha and Khirdalan became the project additional participants.