World Bank Continues Its Support to Improving Azerbaijan Trade and Transit Capacity

June 27, 2013

Washington, June 27, 2013 - The World Bank Board of Executive Directors today approved a US$220 million loan to Azerbaijan as additional financing for the Rail Trade and Transport Facilitation Project. The project supports implementation of Azerbaijan’s national railway development program aiming at improving railway services in the country to foster trade and attract transit cargo between Europe and Central Asia.

"The World Bank believes that the additional financing to this project will help Azerbaijan consolidate the process of modernization of its railways”, says Henry Kerali, World Bank Regional Director for the South Caucasus. “The reforms and investments in the railway sector to date have already been far-reaching and successful in positioning the railway as an important driver of growth for the country".

Rail transport and transit services are important elements of Azerbaijan’s economic diversification strategy with railway services producing income equal to five percent of non-oil exports of the country in 2012. By investing in railway infrastructure and operations, Azerbaijan intends to attract increasing volume of transit in the Central Asia and Black Sea region, thus benefiting from its geographical location as the shortest route between Central Asia and Europe. An oil spill response plan has been completed for the railway and made effective country wide.

The new financing adds to the original US$450 million World Bank loan. The additional financing will be mostly used for power conversion and upgrading the railway signaling system along the East West corridor from Baku to the border with Georgia; the current systems limit traffic to one train every 35 to 40 minutes. “The new power supply and signaling systems will modernize the operation along Azerbaijan’s key transport corridor, allowing trains to run at 8 minute intervals which will increase the network capacity by four times”, indicated Jacques Buré, World Bank Senior Highway Engineer and a leader of the project.

The current World Bank investment portfolio in Azerbaijan includes 17 projects. Since joining the World Bank, commitments to the country have totaled over US$3 billion for 54 projects.



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