Azerbaijan: Second Road Network Development Investment Program - Tranche 2

Sovereign Project | 45389-004 Status: Active


ADB is helping Azerbaijan with road upgrades along a route running from its border with the Russian Federation down to the border with Iran. The second project under the multitranche financing facility will fund a 30-kilometer section between Jalilabad and Shorsulu, and support project implementation and capacity development for the transport sector.

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Procurement Documents

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Project Name Second Road Network Development Investment Program - Tranche 2
Project Number 45389-004
Country Azerbaijan
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3144-AZE: Second Road Network Development Investment Program - Tranche 2
Ordinary capital resources US$ 250.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Transport - Road transport (non-urban) - Transport policies and institutional development

Gender Equity and Mainstreaming No gender elements
Description The project will finance construction of new motorway between Jalilabad and Shorsulu and provide capacity development. With progress having been made in the implementation of the first tranche, the land acquisition and resettlement plan (LARP) implemented, and works contractor mobilized, the government is now requesting ADB in the second PFR for Tranche 2 to help finance Project 2. Project 2 aims to develop Jalilabad to Shorsulu motorway section and provide sector capacity development. Tranche 2 will be the last tranche of the MFF.
Project Rationale and Linkage to Country/Regional Strategy The tranche 2 Project is a high priority of the government and is included in the Road Network Development Program under the Transport Sector Development Strategy. It forms part of the country's primary north south highway linking the country's capital, Baku, to the neighboring countries. Currently, parts of the existing road section are in poor condition, resulting in high transport costs, long delivery times, and road traffic crashes. This constitutes an impediment to non-oil sector growth and poverty reduction in Azerbaijan, as well as regional trade development. Construction of the proposed motorway section completes the southern corridor and will promote national and regional trade, thus contributing to the achievement of the objectives of the state program on poverty reduction and economic development.

Project Outcome

Description of Outcome an adequate, efficient, safe, and sustainable motorway corridor between Shorsulu and Jalilabad in Azerbaijan.
Progress Toward Outcome Last loan review mission was fielded in Oct 2015. Civil works contract was signed in August 2015 and construction supervision consultant contract in October 2015. The contractor has commenced the works and construction of site camp is substantially completed.
Implementation Progress
Description of Project Outputs

About 30 km of a newly constructed motorway between Jalilabad and Shorsulu, and open to traffic;

Improved program management and implementation capacities of AzerRoadService; and

Improved transport sector governance.

Status of Implementation Progress (Outputs, Activities, and Issues)

Civil works contract was signed on 20 August 2015. The contractor commenced the works on 19 January 2016 and has started some civil works activities. Majority of the works carried out by the contractor were geotechnical investigation, surveys and design works.

The contract for supervision consultant was signed on 29 October 2015. The consultant continues to provide implementation support to PIU/ARS.

Geographical Location Masalli-Shorsulu

Safeguard Categories

Environment A
Involuntary Resettlement B
Indigenous Peoples C

Summary of Environmental and Social Aspects

Environmental Aspects

An environmental assessment and review framework was prepared for the entire MFF as required by ADB's Safeguard Policy Statement (2009). According to the MFF, each tranche is to be assessed and categorized separately. The proposed motorway is a new alignment, tranche 1 passes through settled areas, while the proposed tranche 2 section passes through wetlands. The Project, as Project 1, is also classified as environment Category A.

An environmental impact assessment (EIA) report was prepared for the entire alignment covering both sections under Project 1 and the Project. The EIA was approved by ADB and disclosed on the ADB website in 2012. The EIA recommends specific mitigation measures with regard to motorway design and construction and a robust long-term monitoring program. The contracts for the supervision consultant, program management consultant, and civil works will include stringent provisions for compliance with environmental safeguards. An ecological expert and environmental specialist will be engaged to ensure implementation of the environmental management plan. Assurances to mitigate potential harm to the wetlands are also included in the framework financing agreement and loan agreements.

Involuntary Resettlement

The Project is categorized 'B' for resettlement. A LARF for the Program was prepared and approved in July 2012. The LARP was prepared for the Project and land acquisition is complete. A due diligence report was prepared in July 2013, and the LARP was reviewed and updated in March 2014. Except for 6 vulnerable households who lose more than 10% of their land and will be provided employment when construction commences all compensation payments have been made and no outstanding issues are identified.

The construction of the Project requires the acquisition of approximately 172.5 ha in 3 villages within the districts of Neftchala, Bilasuvar, and Jalilabad including 55.22 ha of private land, 21.99 ha of municipality-owned land and 95.29 ha of State reserve land. There is no impact to structures and trees. In total, 86 households will be affected. ARS will submit internal monitoring reports once the construction work commences. Grievance will be monitored through the supervision consultant.

Indigenous Peoples

The Project has no adverse impact on indigenous peoples.

Ethnic Azeri accounts for most of the population in the project area; few other nationalities include Talysh, who are not negatively affected by the Project. Project is thus classified as Category C for indigenous peoples as defined under ADB's SPS (2009).

Stakeholder Communication, Participation, and Consultation
During Project Design Conducted in 2012 and also updated in 2014 while updating the LARP.
During Project Implementation Will be conducted as soon as contractor mobilizes, and any recommendation will be considered for implementation.

Business Opportunities

Consulting Services Consultant recruitment financed follows ADB's Guidelines on the use of Consultants (2013, as amended from time to time).
Procurement Procurement of goods and works follows ADB's Procurement Guidelines (2013, as amended from time to time).

Responsible Staff

Responsible ADB Officer Zheng Wu
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Transport and Communications Division, CWRD
Executing Agencies
Ministry of Transport
1054, Tbilisi Avenue
Baku, AZ1122
Republic of Azerbaijan


Concept Clearance -
Fact Finding -
MRM 28 May 2014
Approval 29 Jul 2014
Last Review Mission -
Last PDS Update 31 Mar 2016

Loan 3144-AZE

Approval Signing Date Effectivity Date Closing
Original Revised Actual
29 Jul 2014 29 Dec 2014 16 Jun 2015 31 Dec 2020 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 332.00 Cumulative Contract Awards
ADB 250.00 29 Jul 2014 106.97 0.00 43%
Counterpart 82.00 Cumulative Disbursements
Cofinancing 0.00 29 Jul 2014 38.64 0.00 15%

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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