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ADB loan aims to digitalize Azerbaijan railway system
Project to improve cargo management, assets maintenance and investment planning
Michael Marray 9 Oct 2024

The Asian Development Bank (ADB) has approved a US$47 million loan to help Azerbaijan digitalize its railway system, enhancing the safety, reliability, and efficiency of the country’s railway networks. 

Through the Azerbaijan Railways Digital Transformation Project, the ADB will support the digitalization of key processes in Azerbaijan Railways Closed Joint Stock Company (ADY), the state-owned national railway operator. These include the management of cargo operations, maintenance and repair of assets, and investment planning. 

The project will develop a system for clients to access information, including shipment pricing and tax calculations. It will also finance digital enhancements to ADY’s corporate functions such as budgeting and contract management.

“A modernized and digitally enhanced railway system will support Azerbaijan’s key role in connecting the economies of East and Central Asia with the Caucasus and Europe,” says ADB director general for Central and West Asia Yevgeniy Zhukov. “We are pleased to back this initiative, which will help Azerbaijan maximize its strong potential as a trade and connectivity hub.”

Despite the country’s strategic location and the government’s focus on infrastructure development, Azerbaijan’s railway sector has struggled to maintain its market share in the face of ageing infrastructure and limited digitalization.

“Digitalization is critical to enhancing operational efficiency, improving competitiveness, and fully leveraging Azerbaijan's role in regional transit corridors,” says ADB transport specialist Nanyan Zhou. “This financing will improve ADY’s operational and financial performance through streamlined data management, and optimized asset management and overall rail operations.”

Azerbaijan’s railway lines are a key node in the Central Asia Regional Economic Cooperation (Carec) Corridors 2 and 6, two of the six key economic and trade corridors criss-crossing the region. The project is aligned with the Carec Transport Strategy 2030 and the Railway Strategy for Carec, 2017–2030 which seek to improve rail and multimodal infrastructure, and commercialize and reform railways.