Azerbaijan: Second Road Network Development Investment Program

Sovereign Project | 45389-001

The Asian Development Bank is working with Azerbaijan to build an efficient and safe southern highway to the capital city of Baku. The project is building about 63 kilometers of road sections on the new Masalli-Shorsulu road and about 33 kilometers of road between the cities of Jalilabad and Shorsulu. These new and improved roads are increasing trade within Azerbaijan and helping the country trade with its neighbors.

Project Details

  • Project Officer
    Sluijter, Jurgen
    Central and West Asia Department
    Request for information
  • Country/Economy
  • Modality
    • Loan
  • Sector
    • Transport
Project Name Second Road Network Development Investment Program
Project Number 45389-001
Country / Economy Azerbaijan
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
MFF Facility Concept 0071-AZE: Second Road Network Development Investment Program
Ordinary capital resources US$ 500.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Private sector development
Sector / Subsector

Transport / Road transport (non-urban)

Gender Equity and Mainstreaming Some gender elements
Description The MFF is intended to finance projects under the Investment program. The projects intended to be financed include: a) construction of a total of approximately 63 km of road sections on the new Masalli-Shorsulu road, comprising (i) an approximately 30 km section between the cities of Masalli and Jalilabad (Project 1) and (ii) an approximately 33 km section between the cities of Jalilabad and Shorsulu (Project 2), and rehabilitation of key sections of R32 and M5/R57 roads, for a total of about 127 km; b) project implementation support for construction supervision and project management covering planning, procurement, project implementation, financial management and safeguard compliance; c) capacity development for AAY comprising support for improving the sustainable management of the road network; and (d) implementation of local roads rehabilitation program.
Project Rationale and Linkage to Country/Regional Strategy

The development of transport infrastructure is one of the key tasks of the Government to sustain GDP growth and promote trade with neighbouring countries. The poor condition of the national road network poses a challenge. Approximately 56% of the main road network is in a poor state and needs urgent repair, and the majority of lower category roads are in an extremely poor condition. The road sector in Azerbaijan faces four main problems: (i) poor road conditions, (ii) inadequate program delivery due to weak institutional capacity, (iii) inadequate maintenance of roads, and (iv) poor quality of construction. These bottlenecks lead to higher than average construction and maintenance costs.

The Second Road Network Development Program will promote regional cooperation and integration, and widen access to social and economic opportunities via improved road infrastructure in Azerbaijan. The program will also strengthen the government's capacity in strategic planning, project preparation and implementation, maintenance and governance in the road subsector.

Impact Trade with neighboring countries expanded and economic growth of Azerbaijan improved.
Project Outcome
Description of Outcome Efficient, adequate, safe, and sustainable road corridors in Azerbaijan achieved.
Progress Toward Outcome To be determined at completion.
Implementation Progress
Description of Project Outputs

A new motorway between Masalli and Shorsulu constructed, and key sections of R32 and M5/R57 rehabilitated.

Program management and implementation capacities of AAY improved.

Transport sector governance improved.

Local roads rehabilitation program implemented.

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

Two tranches have been approved under the MFF. Project 1 (Loan 2921-AZE) is under implementation, while Project 2 (Loan 3144-AZE) is not yet effective.

For Project 1, all contracts have been awarded and are ongoing. Civil works progress is low but is expected to improve in the coming months as delays in the preparation and approval of construction drawings has been largely solved. Safeguard monitoring is ongoing and no major issues were identified.

For Project 2, procurement of civil works and recruitment of construction supervision consultant are at an advance stage.

Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects The projects under tranches 1 and 2 are classified as environment category A. The EIA report recommends specific mitigation measures with regard to highway design and construction and a robust long-term monitoring program, and also proposes an offset program. The contracts for the supervision consultant, program management consultant, and the civil works contractors will include stringent provisions for compliance with environmental safeguards.
Involuntary Resettlement

Tranche 1 is classified as category A for involuntary resettlement.

Tranche 2 is classified as category B for involuntary resettlement.

Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Coordination with NGOs monitoring construction activities in the corridor will continue and be improved.
During Project Implementation Public consultation will continue as a means to achieve maximum beneficiary buy-in during implementation.
Business Opportunities
Consulting Services All consulting services to be financed under the Facility will be procured in accordance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).
Procurement All goods and services to be financed under the Facility will be procured in accordance with ADB's Procurement Guidelines (2013, as amended from time to time). Procurement plans will be developed for each tranche project.
Responsible ADB Officer Sluijter, Jurgen
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Transport and Communications Division, CWRD
Concept Clearance 13 Apr 2012
Fact Finding 25 Jun 2012 to 29 Jun 2012
MRM 24 Jul 2012
Approval 04 Oct 2012
Last Review Mission -
Last PDS Update 17 Mar 2015

MFF Facility Concept 0071-AZE

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 625.00 Cumulative Contract Awards
ADB 500.00 - 0.00 0.00 %
Counterpart 125.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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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

None currently available.

Related Publications

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No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.