Azerbaijan, ADB sign agreement on $132 mln loan for completing railway to Russian border

BAKU. Nov 25 (Interfax) - CJSC Azerbaijan Railways and the Asian Development Bank (ADB) have signed a loan agreement worth $131.5 million to complete the reconstruction of a 166-kilometer section of a double-track railway, including civil structures and railway crossings on the Sumgait-Yalama route, to the border with Russia.

This loan is additional financing for the Railway Sector Development Program approved in 2017, aimed at modernizing railway infrastructure in Azerbaijan, ADB told Interfax. Under this program, the bank had already allocated $150 million to Azerbaijan Railways for the project.

The loan is granted for a term of 22 years, including a 2-year grace period. The government will contribute $29 million to the project.

The additional funding will expand the initial project to cover the modernization of approximately 333 kilometers of the main railway from Sumgait to Yalama, including civil structures and railway crossings.

The railway's construction is expected to be completed by December 31, 2025.

Initially, the project was meant to be completed by the end of 2024. However, the COVID-19 pandemic extended the period for mobilizing personnel and delayed the start of work. In addition, supply chain delays forced the contractor to adopt alternative track construction techniques and source alternative suppliers. The country's railway sector development program also underwent some adjustments.

Azerbaijan has been a member of ADB since 1999. Over the past 25 years, the bank has provided the country with over $5 billion in loans.