Countries and Regions

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p. 4 of 4 BACK | NEXT I. Current Development Trends and Issues II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Assistance Levels

Country Strategy and Program Update 2003-2005: Azerbaijan

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IV. Country Performance and Assistance Levels

A. Lending Level Proposed

28. Paras. 11 and 15 presented the uncertainties affecting the ADB program in Azerbaijan. Under these circumstances, it is difficult to reasonably project the exact size and composition of the annual lending program. A close and sustained dialogue with the Government is needed to resolve the uncertainties. Azerbaijan is classified as a B1 country, which makes it eligible for resources from the Asian Development Fund (ADF). Under a base case scenario, ADF assistance would be expected to be about $75 million over the period 2003-2005, while a high case scenario could raise lending to as high as $90 million over 3 years; a low case scenario would put lending as low as $60-65 million over the same period. The lending level for 2004¹⁰ will be determined on the basis of the performance triggers as set in Appendix 1, Table A1.6.

29. Azerbaijan is also eligible for ADB's assistance funded by its ordinary capital resources (OCR) for revenue-earning projects. The 2003-2005 program includes three loan projects, which the Government has agreed could be financed on OCR terms. Appendix 1, Table A1.7 shows the lending program for the country for 2003-2005.

1. Nonlending Program

30. The TA program for 2003-2005 covers 9 projects totaling nearly $7 million (Appendix 1, Table A1.8). Delivery of the planned TA program will require resources beyond the annual TA resource envelope. All efforts will be made to seek cofinancing.

31. The nonlending support includes a range of economic, thematic and sector work (ETSW). ADB has helped the Government in preparing its poverty reduction strategy and will produce a poverty analysis paper. Governance, private sector, and environment assessments are planned for the second half of the year. Major sector work will be devoted to developing sector strategies and road maps for key sectors.

B. Summary of Changes

32. This is the second year in which a country programming paper is being prepared for Azerbaijan. While there has been delay in processing the 2002 loan program, there is no major change in the composition of the loan or TA pipeline vis-à-vis the Country Strategy and Program Update (2001-2004).

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