Baku, Fineko/abc.az.  Yesterday Azerbaijani Milli Majlis (parliament) ratified the draft loan agreement on a watersupply project signed with in May 2009 with the Japanese Financial Corporation (on 1st October 2008 the JFC included the Japanese International Co-operation Agency (JICA) and the Japanese Bank for International Co-operation (JBIC) in its structure).

Valekh Aleskerov, chairperson of the Parliamentary Committee for Natural Resources, Energy & Ecology, says that JICA is to disburse a $344 million loan within thre project “Watersupply & Sewage in Secondary Cities”.

“The loan finances were given under annual interest rate of 0.65%. Overall cost of the project is $452 million and the Azerbaijani government will direct $108 million fir its realization,” Aleskerov said.

The agreement (signed on 29 May) should be ratified by the MPs and endorsed by Azerbaijani President for 120 days from the day of its signing. Under the agreement, JICA will extend a Y32 bn loan.

Earlier Azerbaijan and Japan have agreed the taxation regime within the project. As tax conditions contrast to regime on double taxation avoiding between the two countries, the loan agreement to be signed by Japan and Azerbaijan will be ratified by Milli Majlis.

The project includes improvement of system of watersupply and sewage of Shirvan, Salyan, Neftchala, Khachmaz, Barda, Yevlakh, Khizi, Gusar, Gobustan and Naftalan regions. At the expense of credit finances it is planned construction of plants on water supply and sewage, purchase and installation of a water pipeline and consulting services.

Earlier the Japanese party was going to finance $260 million for the project.

The agreement will cover financing for the project of watersupply & sewage system upgrade in 10 regions of the country. The JBIC project consultants are Tokyo Engineering (Japan) and ASPI Engineering (Azerbaijan).

According to their recommendation (cost of the project on each city is $30-40 million), the Bank increased estimate of its participation in the project from $160 million up to $260 million for five cities. Total cost of the project to cover Khachmaz, Barda, Alibayramli, Salyan, and Neftchala is estimated at $310 million.

JBIC is ready to apply a combined scheme of financing. One portion of its credit line will be extended for 30-year period under annual rate of 1.4% and the second one for 40-year term under rate of 0.65%. At the same time services of consultants on preparing selection and control over project works will be financed due to credit funds disbursed under rate 0.11% per annum for 40-year period.

01.07.2009 11:34