AIIB and Azerbaijan finalize loan agreement to support Baku Metro expansion.

Azerbaijan and AIIB Sign $180 Million Loan Agreement for Baku Metro Expansion Project

Major Step for Baku Metro Modernisation

Azerbaijan has taken an important step toward modernising its public transport system after signing a major loan agreement with the Asian Infrastructure Investment Bank for the first phase of the Baku Metro Expansion Project. The agreement, signed on June 12, is expected to support the development of metro infrastructure in the capital city and strengthen the country’s long-term plans for safer, more efficient and environmentally friendly urban transport.

Loan Agreement Signed with AIIB

The loan agreement for the “Baku Metro Expansion Project – Phase I” was signed between the Government of Azerbaijan and the Asian Infrastructure Investment Bank, commonly known as AIIB. Alongside this, a separate project agreement was also signed between Baku Metro CJSC and AIIB. Together, these agreements mark a significant milestone for Azerbaijan’s public transport sector.

$180 Million Financing for Public Transport

The total value of the loan agreement is $180 million. The document was signed by Azerbaijan’s Finance Minister Sahil Babayev on behalf of the government. The project agreement was signed by Vusal Aslanov, Chairman of the Board of Baku Metro CJSC. These agreements are designed to finance the first phase of a broader programme aimed at expanding and upgrading the Baku Metro network.

Government Highlights Importance of the Project

Speaking at the signing ceremony, Finance Minister Sahil Babayev said that the project had gone through detailed preparation in line with the requirements of international financial institutions. He noted that Azerbaijan had completed extensive groundwork to attract loan financing under internationally accepted standards.

Largest International Loan for Public Transport

According to the minister, the Baku Metro Expansion Project is not simply another infrastructure initiative. He described it as one of the most important financial projects launched in recent years for the modernisation of Azerbaijan’s transport infrastructure. He also underlined that this is the largest international loan ever attracted for the public transport sector in the history of Azerbaijan.

Rising Transport Demand in Baku

The project comes at a time when Baku faces increasing pressure on its urban transport network. As the population grows and more people travel across the city for work, education, business and daily activities, the demand for reliable public transport continues to rise. A stronger metro system can help meet this growing need.

AIIB Confirms Project Approval Process

Mohamed Sameh, Senior Investment Officer at AIIB, said the project had gone through a comprehensive evaluation process before approval. He noted that detailed environmental and social assessments were carried out and a feasibility study was prepared. After these steps, the project was approved by the AIIB Board of Directors.

Focus on Transparency and Sustainability

Sameh highlighted that the project meets international standards and follows the principles of transparency and sustainability. These points are important because international financial institutions require strong environmental, social and governance standards before approving major infrastructure loans.

20-Year Loan with 4-Year Grace Period

The agreements have been signed for a total period of 20 years and include a 4-year grace period. This repayment structure gives Azerbaijan and Baku Metro CJSC financial flexibility during the early implementation stage of the project, especially while construction and modernisation works are being carried out.

First Phase of Long-Term Metro Programme

The signed agreements will enable the implementation of the first stage of a long-term programme for the modernisation and expansion of the Baku Metro. This phase will form the foundation for future improvements in the city’s metro system.

Darnagul and Khojasan Depots Included

One of the key parts of the project is the ongoing construction of the “Darnagul” and “Khojasan” electric depots. These depots are essential for metro operations because they support the maintenance, repair, storage and technical servicing of metro trains.

Better Operational Capacity for Baku Metro

The construction of these depots is expected to improve the operational capacity of Baku Metro. As the metro network expands, additional train maintenance and parking facilities will be needed. Modern depots can help reduce service disruptions and improve the reliability of metro services.

Green Line Stations to Be Modernised

Another important component of the project is the modernisation of 10 stations located on the Green Line. These upgrades are expected to improve passenger safety, comfort, accessibility and the overall quality of metro services.

Improved Facilities for Daily Passengers

Station modernisation may include better lighting, ventilation, safety systems, passenger information systems, signage and platform facilities. Such improvements can make metro stations more convenient and user-friendly for daily commuters.

Better Accessibility for All Groups

The project is also expected to support better accessibility for elderly people, persons with disabilities, children and families. A modern metro station should provide safe entry and exit points, clear signs and better crowd management facilities.

Safe and Comfortable Public Transport

One of the main goals of the project is to provide residents of Baku with safe, comfortable and accessible public transportation. A reliable metro system can reduce travel time, lower transport costs and make daily movement across the city easier.

Encouraging Shift from Cars to Metro

The project is also expected to encourage people to shift from private cars to metro transport. When public transport becomes faster, safer and more comfortable, more people are likely to choose it over private vehicles.

Contribution to Reducing Traffic Congestion

A stronger metro system can help reduce traffic congestion in Baku. Fewer private cars on the road can mean shorter travel times, less pressure on roads and a better urban environment for residents.

Environmental Benefits of Metro Expansion

The project is expected to contribute to the reduction of carbon emissions by promoting the use of electric metro transport. Public transport systems such as metros are more environmentally friendly compared to heavy dependence on private cars.

Support for Climate Change Commitments

Azerbaijan has linked the project to its international obligations in the fight against climate change. By promoting cleaner public transport, the country can support its wider sustainability and climate goals.

Strengthening Cooperation with AIIB

The loan agreement also reflects Azerbaijan’s growing cooperation with international financial institutions. Partnerships with institutions like AIIB can help the country access long-term financing, technical expertise and international best practices.

AIIB’s Role in Sustainable Infrastructure

For AIIB, the project aligns with its broader focus on sustainable infrastructure and connectivity. By supporting public transport development in Azerbaijan, the bank is contributing to urban mobility, environmental protection and long-term economic development.

Baku Metro’s Role in City Development

The Baku Metro has long been an important part of the capital’s transport system. As Baku continues to grow, the metro network needs continuous investment to meet changing passenger needs and support future urban development.

Economic Benefits of the Project

The project may also create indirect economic benefits. Infrastructure development can support employment, local business activity, engineering services and technical capacity building. In the long run, better public transport can improve productivity by reducing travel delays.

Supporting Better Urban Planning

A strong metro system can also support better urban planning. Improved metro connectivity can link residential areas, business centres and public service locations, helping the city grow in a more balanced and sustainable way.

Public Transport as a Development Priority

The signing of the agreements shows that Azerbaijan is placing public transport modernisation among its key development priorities. By investing in depots, stations and metro infrastructure, the country is focusing on both current transport needs and long-term sustainability.

Long-Term Benefits for Baku Residents

Overall, the $180 million loan agreement between Azerbaijan and AIIB represents a major investment in the future of Baku’s public transport system. With a 20-year financing period and a 4-year grace period, the project is expected to bring long-term benefits for commuters, the city and the environment.

Project to Shape Future of Baku Metro

Once implemented, the first phase of the Baku Metro Expansion Project will help improve transport safety, comfort and accessibility. It will also support Azerbaijan’s climate goals and lay the groundwork for further expansion of the metro network in the future.