World Bank Helps Improve Roads in Azerbaijan

May 25, 2010

Baku, May 25, 2010- The World Bank today approved a US$ 70 million equivalent IDA Credit and a US$ 171.6 million IBRD Loan to the Republic of Azerbaijan for the Third Highway Project. This Project will improve safety and efficiency of the Baku – Shamakhi road by upgrading it from two to four lanes, and will strengthen management of the nascent motorway network.

The Project will help provide better transport services in mountainous central and northern regions of Azerbaijan, which have considerable potential for tourism and industrial production. This section of the road also constitutes part of the shortest route to the Georgian border, and will connect metropolitan Baku area with major agricultural producers in the west of Azerbaijan. In addition to upgrading the Baku – Shamakhi road, the project will help the government establish a framework to develop and manage the motorway network which includes modern financing scheme and maintenance practices for motorways.  

"We are pleased that the project is going to put Shamakhi and its region just about an hour away from Baku,” - said Jacques Bure, leader of the World Bank team that prepared the project. “This will be a real upgrade and a boost to the region and the country at large. In addition, travelling the road will become safer with the 4 lanes.  Azerbaijan needs a solid 1,000 km motorway to benefit its economy and we are looking forward to put together with our counterparts the strategy and financing for expanding the motorway network."

With this project, the World Bank starts the third phase of its assistance to Azerbaijan’s road sector. This phase will use a two-fold approach, one focusing on Azerbaijan’s motorway network and transport corridors, and another focusing on secondary, local roads as part of the regional development strategy.

“Many countries similar to Azerbaijan have achieved good results from separating motorway management from management of local roads,” - said Gregory Jedrzejczak, World Bank Country Manager for Azerbaijan. “This work will require capacity building and institutional development of Azeryolservice, Azerbaijan’s national road administration.”

The Third Highway Project has three components:
Motorway Improvement component will support upgrading a 100 km section of the existing two lane Baku-Shamakhi road into a four-lane motorway and related road safety activities.

Institutional development component will support (a) a study to explore options for management and financing, and efficient allocation of resources for Azerbaijan’s motorways; and (b) institutional development of the Azerbaijan’s road administration in motorway operation and maintenance.

Project Management component will finance consultant services, equipment and technical assistance to support the capacity of the project implementation unit.
Azerbaijan joined the World Bank in 1992. Since then, commitments to the country have reached approximately US$ 2.16 billion for 42 projects.

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