Press Release

OPEC Fund extends US$8 million loan to Azerbaijan to help finance irrigation project

15/2006 March 21, Vienna, Austria
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The OPEC Fund for International Development today signed a US$8 million loan agreement with the Republic of Azerbaijan to help finance construction of the Velvelichay – Takhtakorpu Canal, a key component of the Samur Absheron Irrigation System in the northeast of the country. The project seeks to improve the availability of water for both irrigation purposes and domestic use.

Agriculture is a major contributor to Azerbaijan’s GDP and employs one-third of the population . However, with an average annual rainfall of just 200-300 mm, almost all agricultural land faces arid or semi-arid conditions. Irrigation is therefore vital for reliable crop production and supports about 90% of all agricultural output.

Construction of the Valvalichay-Takhtakorpu Canal is part of Government’s agricultural sector reform program, which includes rehabilitating, upgrading and extending the country’s main north-eastern irrigation and water supply system.

Under the project, civil works will comprise the construction of 44.7 km of canal, together with related structures, such as siphons, flood under- and overpasses, and road and pedestrian bridges.

On completion, the project will improve water supply to an existing 150,000 ha of irrigated land and extend irrigation to a further 34,000 ha. The resulting increase in agricultural potential will help create income-generating opportunities and lead to better living standards among the rural population, who will further benefit from improved access to potable water.

This is the second loan to be extended by the OPEC Fund to Azerbaijan. The first supported a project in the transportation sector.

Today’s agreement was signed in Vienna by H E Mr. Fuad Ismayilov, Ambassador of the Republic of Azerbaijan to Austria, and by HE Mr. Jamal Nasser Lootah, Chairman of the Governing Board of the OPEC Fund.