Project Name Urban Water Supply and Sanitation
Project Number 35087-013
Country Azerbaijan
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2119-AZE: Urban Water Supply and Sanitation
Asian Development Fund US$ 20.00 million
Loan 2120-AZE: Urban Water Supply and Sanitation
Ordinary capital resources US$ 10.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Water and other urban infrastructure and services - Urban policy, institutional and capacity development - Urban sewerage - Urban water supply

Gender Equity and Mainstreaming Some gender elements
Description The project objective is to improve the quality, reliability, and sustainability of WSS services in the towns of Agdash, Goychay, and Nakhchivan. This objective will be achieved through (i) construction of new optimally sized water supply and sanitation infrastructure and strategic rehabilitation of selected facilities; and (ii) establishment of new water utilities as open joint stock companies (JSCs), and creating in them operational and managerial capacity by engaging the services of an experienced international operator on the basis of a performance-based management contract.
Project Rationale and Linkage to Country/Regional Strategy

To be determined.

In the adoption of the State Program for Poverty Reduction and Economic Development, the Government stated its intentions to improve the performance of municipal WSS systems. The Government s recent focus on the development of regional infrastructure, including the WSS, is in line with its general policy to support non-oil development, particularly the utilities sector Also, a State Program on Socio-Economic Development of the Regions was recently adopted, which includes the proposed Project in the three towns

Impact Improved living and health conditions of the population in the project area
Project Outcome
Description of Outcome Provision of safe, reliable, and sustainable water supply services in Agdash, Goychay, and Nakhchivan
Progress Toward Outcome Water intake facilities constructed in three towsn. Water is being supplied to Nakhchivan. On completion of new networks under the Water Supply and Sanitation Investment Program, water will be supplied in Agdash and Goychay.
Implementation Progress
Description of Project Outputs

Constructed and rehabilitated water supply intake infrastructure

Three new WSS utilities in the form of JSCs are established, and a foundation for their sustainable operations and management is instituted

Status of Implementation Progress (Outputs, Activities, and Issues) Water intake works were commissioned in Agdash (November 2009) and Goychay (January 2010). Water intake works in Nakhchivan are complete and the executing agency proposes to construct a water treatment plant, under the recently approved Azerbaijan Water and Sanitation Investment Program. JSCs in three towns were established in 2008.
Geographical Location Agdash, Goychay, and Nakhchivan
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples
Summary of Environmental and Social Aspects
Environmental Aspects Initial environmental examination (IEE) was carried out for all subprojects and shows no significant adverse environmental impact. The IEE was approved by the Ministry of Ecology and Natural Resources of Azerbaijan.
Involuntary Resettlement The Government will ensure and cause AzerSu to ensure that the construction of WSS services will be on the existing right-of-way or on state-owned land. The Project will not entail land acquisition from private ownership, and no persons will be adversely affected in terms of ADB's Involuntary Resettlement Policy (1995). In the event of unforeseen land acquisition from private ownership and/or resettlement, the Government and/or AzerSu will prepare and have necessary planning documents approved by ADB before award of civil works contracts, and implement any such resettlement measures in accordance with ADB's Involuntary Resettlement Policy (1995).
Indigenous Peoples Most of the population in the project areas are Azeris; the Project will not affect any ethnic minority.
Stakeholder Communication, Participation, and Consultation
During Project Design Extensive public consultations took place during project preparation. As part of the Project's preparation a Social Assessment (SA) was undertaken between April 20th to June 15th 2003 to provide a picture of the existing user behaviour and needs, and to develop a participatory framework to ensure a sustainable water supply and sanitation project. The SA process included project household surveys; focus groups meeting; stakeholder consultation, and informal interviews with vulnerable groups and other members of the community to assess the realities of water. Public consultation to-date has played an important role in the preparation process to screen design options to minimize social and environmental impacts. Further public consultations will take place once the project begins, and within this process, the necessary documentation as needed for the consultative process will be made available in the Azeri language.
During Project Implementation Consultations were held with Town Water Users' Association.
Business Opportunities
Consulting Services

The Government will select and engage an international consulting firm in association with domestic consultants in accordance with ADB's Guidelines on the Use of Consultants, and other arrangements satisfactory to ADB for the engagement of domestic consultants. The consulting firm will assist the EAs and the PMUs in project implementation and management, preparation of detailed design, procurement and contracting, construction supervision, finance and accounting, and social and poverty assessments. The international consulting firm will be recruited using ADB's Quality and Cost-Based Selection (QCBS) method. A transaction adviser engaged under the associated TA will assist with recruitment of the MC for the operation and management of the new WSS utilities. The proposed MC will be recruited in accordance with ADB's Guidelines on the Use of Consultants, using the QCBS method with appropriate adjustments. The Project will provide about 68 person-months of international and 570 person-months of domestic consulting services to support project implementation, including detailed design and supervision. Consulting services will cover (i) project management, (ii) WSS engineering, (iii) detailed engineering design and construction supervision, (iv) financial management and accounting, (v) a WSP specialist, (vi) a procurement specialist-contract engineer, and (vii) a social specialist. Outline terms of reference (TORs) and overall details of the project are reflected on ADB web site (

Eligible firms having international association and sufficient experience, desirous of undertaking the assignment are invited to express their interest immediately to the undersigned stating background of their organization and details of professional experience to be assigned to deliver the required service.

Procurement Civil works estimated to cost more than $1 million and equipment and materials above $500,000 will be contracted using the international competitive bidding (ICB) procedures. Civil works valued at $1 million equivalent or less will be contracted out using the local competitive bidding (LCB) procedures in accordance with the tendering and bidding law and related regulations acceptable to ADB. Equipment and materials packages valued at or under $500,000 will be procured through international shopping (IS) procedures.
Responsible ADB Officer Vijay Padmanabhan
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Urban Development and Water Division, CWRD
Executing Agencies
AzerSu Joint Stock Company (AZERSU)
Farid Mammadov
67, Tbilisi av.
Baku AZ1012, Azerbaijan
State Comm Urbn Plnng & Arhtcture of Nakhichevan
Asgar Asgarov
H. Aliyev pr 42
Nakhichevan City
Nakhichevan Autonomous Republic
Concept Clearance 08 Mar 2002
Fact Finding 24 May 2004 to 11 Jun 2004
MRM 01 Jul 2004
Approval 07 Dec 2004
Last Review Mission -
PDS Creation Date 31 Jan 2007
Last PDS Update 08 Jan 2013

LoanĀ 2119-AZE

Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Dec 2004 29 Nov 2005 27 Oct 2006 30 Jun 2011 - 30 Nov 2011
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 29.90 Cumulative Contract Awards
ADB 20.00 07 Dec 2004 20.55 0.00 98%
Counterpart 9.90 Cumulative Disbursements
Cofinancing 0.00 07 Dec 2004 20.93 0.00 100%

LoanĀ 2120-AZE

Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Dec 2004 29 Nov 2005 27 Oct 2006 30 Jun 2011 - 06 Feb 2012
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 10.00 Cumulative Contract Awards
ADB 10.00 07 Dec 2004 9.36 0.00 97%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 07 Dec 2004 9.67 0.00 100%

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