Azerbaijan joined the World Bank and the International Development Association (IDA) in
1992. The major focus of the World Bank's work to date has been to assist the country in
its transition by providing policy advice, financing for both investments and the
government budget, and coordination of aid. In particular, the World Bank is working with
the authorities to strengthen the government's institutional capacity to manage its
petroleum resources and formulate key policy changes to accelerate reform.
In April 1995, the World Bank approved its first project to Azerbaijan, an IDA credit
to finance advisory services and create a framework to encourage foreign private
investment in the petroleum sector (US$21 million). Another IDA project, approved in June
1995, provides a credit to improve the water supply in Baku (US$61 million).
In early 1996, two additional operations were approved: an Institution Building
Technical Assistance Project (US$18 million) in July 1995, and a US$65 million
Rehabilitation Credit (US$65 million) in August 1995.
Three projects were approved in Fiscal 1997. The Gas Rehabilitation Project (US$21
million), approved in September 1996, was designed to promote the efficient use of gas by
upgrading measurement instrumentation, investments in equipment, and support for gas
commercialization. The Farm Privatization Project (US$15 million), to accelerate the
government's program for land privatization and farm restructuring of representative state
and collective farms, was approved in January 1997.
The first Structural Adjustment Credit (US$70 million), approved in 1997, focussed on
trade liberalization, privatization, legal and banking sector reforms. A credit for Urgent
Environment Improvement (US$20 million) was approved in June 1998.
In March 1999 the government of Azerbaijan held an international conference, launching
its public sector reforms with World Bank support. A Structural Adjustment Credit and
related Technical Assistance Project to support these reforms have also been prepared.
In Fiscal 1999, four projects were approved: (i) a Pilot Reconstruction Project (US$20
million) plus a US$10 million supplement to facilitate the repatriation of
internally-displaced persons as a result of the conflict over Nagorno-Karabakh; (ii) a
Cultural Heritage Project (US$8 million) to support the government's efforts in the
conservation and partial reconstruction of four historical monuments; (iii) an Education
Project (US$5 million) to improve the effectiveness of teaching and learning and provide
assistance in curriculum development as well as the monitoring and evaluation of schools;
and (iv) an Agricultural Development Project (US$30 million) to assist in increasing the
productivity of private farmers. Furthermore, a supplement to the Structural Adjustment
Credit (US$7 million) was provided to help alleviate the adverse effects of the Russian
In fiscal 20002, an Irrigation and Drainage Infrastructure Project (US$42 million) was
approved to prevent the decline in supplying water to Baku City; eliminate further
deterioration of the supply of irrigation water along the Samur-Apsheron Canal; and
improve drainage and reduce water logging and salinity in irrigation areas along the Main
As of June 30, 2000, there were 15 operations in Azerbaijan with IDA commitments
totaling US$411 million.