ECONOMY
WORLD BANK PLEDGES $5MLN TO AZERBAIJAN
The provision of additional financing is in response to the Government’s request to help cover the increased cost of the project due to the rising price of construction materials and fuel, as well as the more than originally estimated rehabilitation needs, and will add to the original US$42 million credit from the International Development Association for the project.
In order to prevent further deterioration of the irrigation and drainage system, the Government and World Bank initiated RIDIP to rehabilitate some important parts of the Samur-Absheron Canal system that provides irrigation water to the large agricultural area in the north of the country and is a major contributor of drinking water to the Baku metropolitan area.
As of today, a significant portion of physical works on this canal system has been completed. The project also supports completion of construction of the Mil-Mugan Collector Drain to reduce water logging and salination in the central and southern agricultural regions of the country.
The works under this activity are also well advanced.
The additional credit will help finance a cost overrun due to higher costs for the rehabilitation and completion of the irrigation and drainage infrastructure works under the original project.
The cost overrun mainly occurred due to an increase during the last few years in the price of construction materials (in particular steel and cement, and fuel); and a greater than anticipated volume of rehabilitation work for one component of the project.
The original project development objectives and expected outcomes will remain unchanged.
Azerbaijan joined the World Bank in 1992. Since then, commitments to the country total approximately US$ 930 million for 30 operations.