Azerbaijan : Modernizing Vocational Education and Training for Economic Diversification Sector Development Program

Sovereign Project | 54295-001

The proposed sector development program (SDP) will help transform vocational education and training (VET) in Azerbaijan to develop the human capital needed for economic diversification and the fourth industrial revolution (4IR), and promote gender equality. The SDP is closely aligned with the Government of Azerbaijan's strategic objective of transforming the country's human capital into a driving force to accelerate sustainable, inclusive, private sector-led, and diversified growth. It is also an integral part of the country partnership strategy of the Asian Development Bank (ADB) for Azerbaijan and its strategic pillar of improving infrastructure and strengthening human capital.

Project Details

  • Project Officer
    Haydarov, Aziz K.
    Central and West Asia Department
    Request for information
  • Country/Economy
    Azerbaijan
  • Sector
    • Education
Project Name
Modernizing Vocational Education and Training for Economic Diversification Sector Development Program
Project Number
54295-001
Country / Economy
  • Azerbaijan
Project Status
Proposed
Project Type / Modality of Assistance
  • Loan
Source of Funding / Amount
Loan: Modernizing Vocational Education and Training for Economic Diversification Sector Development Program
Source Amount
Ordinary capital resources US$ 120.00 million
OPEC Fund for International Development US$ 85.00 million
Loan: Modernizing Vocational Education and Training for Economic Diversification Sector Development Program (MVESDP)
Source Amount
Ordinary capital resources US$ 30.00 million
Operational Priorities
  • OP1: Addressing remaining poverty and reducing inequalities
  • OP2: Accelerating progress in gender equality
  • OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
  • OP6: Strengthening governance and institutional capacity
Sector / Subsector
  • Education / Education sector development - Technical and vocational education and training

Gender
Effective gender mainstreaming
Description

The proposed sector development program (SDP) will help transform vocational education and training (VET) in Azerbaijan to develop the human capital needed for economic diversification and the fourth industrial revolution (4IR), and promote gender equality. The SDP is closely aligned with the Government of Azerbaijan's strategic objective of transforming the country's human capital into a driving force to accelerate sustainable, inclusive, private sector-led, and diversified growth. It is also an integral part of the country partnership strategy of the Asian Development Bank (ADB) for Azerbaijan and its strategic pillar of improving infrastructure and strengthening human capital. In addition, the SDP is aligned with ADB's Strategy 2030 and its operational priorities of addressing remaining poverty and reducing inequalities, accelerating progress in gender equality, and strengthening governance and institutional capacity; and with the human development cluster of the Central Asia Regional Economic Cooperation (CAREC) Strategy 2030.

Transforming Azerbaijan's VET system requires sector policy reforms to overcome the binding constraints, and modern VET institutions. In this context, the two-tranche, stand-alone policy-based loan (PBL) component will support the government's medium-term reforms to strengthen the financing, quality and relevance, and institutional set-up of VET; while the project component will help modernize the selected VET institutions and bolster the institutional capacity to deliver the reforms.

The expected impact is the modernization of Azerbaijan's human capital into a driving force for accelerating sustainable, inclusive, private sector-led, and diversified economic growth. The expected outcome will be the improved responsiveness of the VET system to the needs of the labor market and 4IR. The SDP's three outputs are: (i) Financing of vocational education and training improved, (ii) Quality and relevance of vocational education and training strengthened, and (iii) Institutional framework of the vocational education and training sector strengthened.

Project Rationale and Linkage to Country/Regional Strategy

Azerbaijan's economy still depends on the oil industry and is vulnerable to volatile oil production and prices. To accelerate economic diversification, the government's focus since 2016 has been on developing agricultural production and processing, heavy industry and mechanism engineering, tourism, logistics and trade, and information and telecommunication technology (ICT). Growth in these non-oil sectors is constrained by a skills shortage. Young workers often lack job-specific technical and soft skills such as problem solving, communication, teamwork, and leadership.

The SDP builds on the strategic recommendation that ADB program in Azerbaijan should have a greater focus on building human and social capital in parallel with developing and improving physical structure and support policy reforms. Addressing the long-standing VET sector's issues needs both the policy reform support and modernized VET institutions. The proposed program builds on the demand-driven technical and policy advice on VET and youth employment in 2020, the assessment of the impact of 4IR on Azerbaijan's high-growth potential sectors, and the ongoing support to public sector management and PPPs in Azerbaijan.

Impact

Modernized human capital as a driving force for accelerating sustainable, inclusive, private sector-level, and diversified economic growth.

Outcome

Responsiveness of the VET system to the needs of the labor market and 4IR improved.

Outputs

Financing of VET improved

Geographical Location
Nation-wide

Safeguard Categories

Environment
B
Involuntary Resettlement
C
Indigenous Peoples
C

Summary of Environmental and Social Aspects

Environmental Aspects
due diligence ongoing
Involuntary Resettlement
due diligence ongoing
Indigenous Peoples
due diligence ongoing

Stakeholder Communication, Participation, and Consultation

During Project Design
The Ministry of Finance (MOF) will be the executing agency for the PBL. MOE will be the executing agency for the project loan. MOE and the SAVE will be the implementing agencies for the PBL.
During Project Implementation
The PBL implementation period will be June 2020-September 2024: the period of tranche one is June 2020-September 2022, and the period of tranche 2 is October 2022-September 2024. The PBL tranches ($60 million each) will be disbursed upon fulfillment of the policy measures of the respective tranche. The project implementation period will be September 2022-December 2025. A program implementation unit (PIU) will be established at SAVE to support implementation of the PBL and the project. The government will provide in-kind support, including office accommodation, for the PIU. A steering committee chaired by MOE, with MOF, SAVE, and the Ministry of Labor and Social Protection of Population as members, will oversee the program implementation.

Business Opportunities

Consulting Services
About 9 person-months of international and national ADB staff inputs are required to process the program. A transaction TA of $750,00 from ADB's Technical Assistance Special Fund (TASF-others) implemented during May 2022May 2023 is proposed to help prepare the tranche 1's policy measures, support procurement readiness of the project, and enable smooth startup of the program's implementation. The TA will support provision of about 15 person-months of international and 25 person-months of national consultant inputs. The government will provide in-kind contributions, including office accommodation and counterpart staff.
Procurement
The project component, financed through ADB loan of $30 million and government counterpart funding of about $10 million, will support procurement of modern 4IR-relevant equipment and minor works related to the proper installation of the procured equipment in the selected VET institutions. It will also support capacity building of government staff and personnel of VET institutions, and help design and implement the policy measures under tranche 2 and the post-program partnership framework. Procurement will follow ADB's Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time)

Contact

Responsible ADB Officer
Haydarov, Aziz K.
Responsible ADB Department
Central and West Asia Department
Responsible ADB Division
CWSS
Executing Agencies
Ministry of Finance
Ministry of Science and Education

Timetable

Concept Clearance
25 May 2022
Fact Finding
31 Oct 2022 to 11 Nov 2022
MRM
24 Feb 2023
Approval
-
Last Review Mission
-
Last PDS Update
27 May 2022

Funding

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.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.


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

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Procurement Manager Individual - Consulting Closed
Deputy Program Director Individual - Consulting Closed

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.