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Nearly 1.5 Million Rural Residents in Azerbaijan to Benefit from Improved Infrastructure and Better Social Services

July 5, 2012

The World Bank’s Board of Executive Directors today approved a US$ 30 million loan for the Second Rural Investment Project in Azerbaijan (AzRIP-2). The goal of the project is to improve access to community-driven rural infrastructure and expand economic activities for rural households. As a result of the project, nearly 1.5 million rural residents in Azerbaijan will have better access to infrastructure and social services.

With US$ 23.6 million as Government contribution, the total financing for AzRIP-2 will be US$ 53.6 million. This new project builds on results of a highly successful previous project which, inter alia, contributed to raising incomes of 600,000 farmers, improving irrigation services for 700,000 people and providing safe drinking water to 150,000 villagers.

"AzRIP is widely recognized as a highly successful program," said Daniel Owen, World Bank Senior Social Development Specialist and the Project Leader. "Over the past seven years, it has demonstrated comprehensively the dividends from investing in community empowerment and local development to serve and improve the well-being and economic prospects of the poor. AzRIP-2 will scale up the project into currently unserviced districts, provide support for building livelihood opportunities for the rural poor, continue to finance community identified rural infrastructure investments, and strengthen the capacity of communities in partnership with municipalities to identify, plan and implement effectively their development priorities."

Almost half of Azerbaijan’s population and about 40 percent of the country’s work force live in rural areas. Despite the substantial increase in government investment in basic infrastructure over the past few years, there remain gaps in terms of access and quality of public services for the rural population. A key constraint is the infrastructure deficit manifested by lack of rural roads, irrigation and drainage systems.

"Programs such as AzRIP are critical in shaping public service delivery in rural Azerbaijan,” said Henry Kerali, new World Bank Regional Director for the South Caucasus. “The project has given the rural poor primary decision-making authority in determining their priority development needs, and has significantly increased access to services for over 1.5 million people through infrastructure improvements. In particular, AzRIP-2 seeks to strengthen access to improved rural infrastructure, which would lead to increased productivity in agriculture, higher incomes for farmers, and improved quality of life for beneficiaries."

The project objectives will be achieved by financing demand-driven micro-projects in rural infrastructure. Potential investments include basic economic infrastructure (such as rehabilitation of secondary roads, potable water systems, irrigation infrastructure, electricity transformers) and social infrastructure (such as rehabilitation and construction of schools and clinics), based on priority needs identified by communities. The project will target rural communities with a population of between 1,000 and 10,000 people. The project will also support pilot income generation activities in a selected number of communities, which have earlier benefited from infrastructure improvements.

Since joining the World Bank in 1992, the commitments to Azerbaijan total approximately US$ 3.1 billion for 43 projects.

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