Media Center

News Release

Two Loans Signed for East-West Highway Project

BAKU, AZERBAIJAN (1 June 2006) - The Asian Development Bank (ADB) and the Government of Azerbaijan today signed two loans totaling US$52 million to finance the East-West Highway improvement project.

The project will improve 127 km of two-lane paved road on the Yevlakh-Ganja and Qazakh-Georgian border sections of the highway, as well as 65 km of connecting local roads. It will also support policy reform and improved governance by strengthening the country's institutions working in the road sector.

"ADB assistance is being seen by the Government not simply as financing, but instead as a source of knowledge to support an ambitious program of policy and structural reforms," says Matthew Westfall, ADB Country Director in Azerbaijan. "We can help in designing good projects based on international best practice, and bringing better transparency and efficiency to project implementation."

The project traverses six rayons (regions) with a total population of about 700,000, of which about 87,000 in the project area are internally displaced people and refugees, who are dependent on road transport for access to basic services and assistance from the Government and relief agencies.

"Improving road connectivity and infrastructure will reduce transportation costs, enhance access to markets for producers in the regions, facilitate intra-regional trade, expand economic and job opportunities, and foster social and community development," Mr. Westfall adds.

ADB is providing a blend of two loans - $49 million from its ordinary capital resources (OCR) for road improvement and cross-border facilitation and $3 million from the concessional Asian Development Fund for institutional strengthening.

The OCR loan has a 24-year term, including a grace period of four years, with interest determined in accordance with ADB's LIBOR-based lending facility. The concessional loan has a 32-year term, including a grace period of eight years, with interest rate set at 1.0% per annum during the grace period and 1.5% subsequently.

The Road Transport Service Department will be the executing agency for the road improvement and institutional strengthening components, and the State Customs Committee will be the executing agency for the cross-border facilitation. The project is due for completion in 2010.

Visit www.adb.org/azrm for more about ADB's work in Azerbaijan.

ADB, based in Manila, is dedicated to reducing poverty in Asia and Pacific region through pro-poor sustainable economic growth, social development, and good governance. Established in 1966, it is owned by 65 members - 47 from the region. In 2005, it approved loans and technical assistance totaling $6.95 billion and $198.8 million, respectively.