Azerbaijan Railways (ADY) and the Asian Development Bank (ADB) have signed a loan agreement worth $131.5 million to rehabilitate a crucial section of the International North-South Transport Corridor (INSTC) in Azerbaijan, aiming to strengthen regional connectivity.
The agreement was signed by Rovshan Rustamov, Chairman of ADY, and Sunniya Durrani-Jamal, ADB’s Country Director for Azerbaijan. The total project cost is estimated at $160.5 million, with the Azerbaijani government contributing $29 million.
According to the agreement, the borrower must regularly adjust freight and passenger tariffs to maintain financial sustainability, covering market risks such as adequate debt service coverage, inflation, currency, and interest rate risks. Azerbaijan Railways must maintain a debt service coverage ratio above 1.1 after the approved financial restructuring plan is completed in 2024.
