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 Press release - World Bank Assists Farm Privatization In Azerbaijan (WB)

 Press release date: 15.01.1997

  FOR IMMEDIATE RELEASE 
The World Bank
Europe and Central Asia Region
News Release No. 97/1233 ECA

Contact: Jan Pakulski
Tel: (202) 473-1797
Fax: (202) 522-3362
Email: JPakulski@worldbank.org

WORLD BANK ASSISTS FARM PRIVATIZATION IN AZERBAIJAN

WASHINGTON, January 16, 1997 - The World Bank today approved a US$14.7 million equivalent credit to Azerbaijan to help finance a Farm Privatization Project. The project will be financed by funds from the International Development Association (IDA), the Banks concessional lending arm, and will support the governments program for land privatization and farm restructuring.

Since improvements in the agricultural sector are vital to improving the living standards of Azerbaijans rural population, the government has placed a high priority on accelerating the process of land privatization and farm restructuring. In cooperation with the World Bank and the International Fund for Agricultural Development (IFAD), the five raions of Barda (Ghiliinjili farm), Lenkoran (Narimanov farm), Salyan (Shafag farm), Udjar (Gulaband-Hatai farm), and Xachmaz (Yergouz farm) have been chosen to help determine the level of resources needed for farm restructuring. The Bank-assisted project is designed to develop new models of farm restructuring and farm support in the five raions which will serve as a basis for wider geographical replicability.

The Farm Privatization Project consists of the following four components:

Farm Privatization Support Services (20.03 million)

Land registration services (US$2.32 million) will

  • Enable the State Land Committee in Baku and in the project raions to systematically register the new land parcels that have been allocated in accordance with the land privatization process; and issue land titles to individuals; and
  • Help to create legal documents for the purchase and sale of land, and inheritance, gift, mortgaging, leasing, subdivision and consolidation of land, once the land markets become operational.

Farm Information and Advisory Services (US$2.81 million) will

  • Support the establishment of a Farm Development Units at the Ministry of Agriculture in Baku and in the Department of Agriculture in each of the project raions; and
  • Provide information services and advisory services for land privatization and farm restructuring.

Water Users Associations (US$1.46 million) will

  • Provide equitable, efficient and timely distribution of irrigation water at the field level; and
  • Mobilize and train farmers to form groups and take responsibility for operation, maintenance, cost recovery and management of water resources.

Privatized Farm Credit Services (US$13.44 million)will

  • Enable farmers to operate as independent units in a market environment by channeling seasonal and long-term investments to privatized farm units emerging from the privatization process; and
  • Train staff who are knowledgeable about agriculture in the necessary credit analysis for lending in a market economy.

Rehabilitation of Main Irrigation Water Supply and Drainage Works in the Project Farms (US$5.52 million) will

  • Clean and desilt about 500 km of main, secondary and tertiary irrigation canals and 245 km of collectors and field drains;
  • Repair and reconstruct 330 water control structures and 320 tertiary outlets in the five farms;
  • Repair underground pipelines, drainage pipelines, drainage pumps and hydrants, and reconstruct pipeline intake structures and construct new drainage pumps;
  • Construct new tertiary canals, tertiary intakes, canal regulators, tertiary outlets, and a weir on the Dizdaru river to improve the water intake to Narimanov farm; and
  • Construct two storage reservoirs--one on Narimanov and the other on Yergouz, and install a pumping unit to lift water for about 300 hectares on Yergouz farm.

Community Development Program (US$1.04 million) will

  • Provide support to community development activities such as establishing business centers; promoting the development of entrepreneurial skills, and lay the framework for the preparation of a larger social development project;
  • Develop participatory approaches to ensure equity in the land distribution and farm restructuring process; and
  • Support training in new skills for the farm workers, finance small-scale farm businesses, and provide business advice and information facilities.

Project Management Component (US$2.23 million) will

  • Coordinate project work between the staff of the Ministry of Agriculture, State Land Committee, State Irrigation Committee, State Committee for the Management of State Property, Agroprombank, and representatives from the farms;
  • Establish a project management unit in Baku for day to day project implementation and establish additional project implementation units in the project raions; and
  • Assist with training, technical assistance, office equipment, and operating expenses.

The total project cost is US$28.82 million. The Banks credit of US$14.7 million will finance 51  percent of the total project cost. The credit will be at IDAs standard rate with a maturity of 35 years, including a ten year grace period. The project is also being co-financed by an IFAD loan of US$9.3 million at concessionary terms with a maturity of 40 years and a ten-year grace period.

Since joining the World Bank in 1992 and IDA in 1995, Azerbaijan has received approximately US$200 million equivalent in Bank/IDA commitments for six projects.



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