TODAY.AZ / Business

ADB to consider first tranche allocation

14 June 2016 [16:22] - TODAY.AZ

/By Azernews/

By Nigar Abbasova

Board of directors of the Asian Development Bank (ADB) will discuss the allocation of the first tranche for improving the electric power distribution system in Azerbaijan on June 22.

Nariman Mannapbekov, Country Director for the Asian Development Bank (ADB) said the first tranche will comprise $250 million. The funds will be directed to the purchase of necessary equipment in substations as well as purchase of meters for the population of the country.

“Credit will be allocated for the term of 25 years with the grace period of 5 years. Rate of interest will be formed on the basis of London interbank rate (LIBOR) with low level of margin of 0.4 percent. The terms will depend on the government’s choice,” he added.

The project is expected to cover all regions of Azerbaijan except Baku.

ADB and Azerbaijan have signed a memo on the mutual understanding on the investment program worth of $1 billion in May 2015, the document envisages reconstruction and modernization of the country’s power supply system.

The investment program project envisages allocation of funds with the amount of $750 million in 3 stages ($250 million in each stage), another $250 million will be provided by the government of Azerbaijan.

The funds are planned to be directed to the update of the power distribution system, substations, improvement of services, and replacement of meters by new digital ones as well as strengthening of human resources potential of Azerishiq OJSC.

The Asian Development Bank which was established in the 1966 has 67 members, 48 of which are from the Asia and Pacific region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

With its headquarters in Manila, Philliooines ADB’s main objective is to help its developing member countries reduce poverty and improve the quality of life of their people.

Operations of the bank in Azerbaijan are closely aligned with the government's priorities, including diversifying the economy beyond the oil sector. Azerbaijn has become a member in 1999, the country’s share in the bank’s capital amounts to 0.5 percent. Leading shareholders og the bank are Japan and USA (with 31.2 percent of total stock capital), India (12.8 percent), Australia, South Korea and Canada (16 percent)

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