Regions and Countries

	Table of Contents
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 2005-2006: Azerbaijan

---

IV. Country Performance and Assistance Levels

A. Lending Level Proposed

33. Azerbaijan is classified as a B1 country, which makes it eligible for resources predominantly from the Asian Development Fund (ADF). The allocation of ADF funds will depend on the revised performance-based allocation (PBA) policy, expected to be finalized later in 2004. For planning purposes, the annual allocation has been set at $17.1 million in 2004- 2006, but this will be subject to change based on the revised PBA policy.

34. Azerbaijan is also eligible for a limited amount of loan assistance funded out of ADB's ordinary capital resources (OCR). The Government recently reconfirmed its willingness to accept OCR funds and it was agreed that the first OCR loan be processed expeditiously for approval by the end of 2004. The 2005-2006 program includes three loan projects funded from OCR resources and one blended loan, combining both OCR and ADF resources.

B. Nonlending Program

35. The TA program for 2005-2006 covers 12 projects totaling $5.5 million (Appendix 1, Table A1.7). Delivery of the planned TA program will require resources beyond the annual TA resource envelope. Full efforts will be made to seek cofinancing.

36. The nonlending support includes a range of economic, thematic, and sector work. ADB has helped the Government in preparing and implementing its poverty reduction strategy; governance, private sector, environment, and gender assessments are planned for 2004.

C. Summary of Changes

37. The proposed changes to the program compared to the last CSPU are summarized in the following table. The major changes include the addition of the Micro and Rural Finance Development Project and the Central Corridors Roads Improvement II Project and the deferment of the North-South Corridor Roads Improvement Project. For reference, the 2004 Assistance Program for Lending Products and the 2004 Assistance Program for Nonlending Products and Services are provided in Appendix A4.1 and Appendix A4.2, respectively.

Table 1: Proposed Changes to the Program

Back III. Portfolio Management Issues	Country Strategy and Program Update 2005-2006: Azerbaijan