EIB ready to finance up to 50% of Baku Metro modernization project - EXCLUSIVE

The European Investment Bank (EIB) is currently working on the pre-appraisal of the extension of the Baku Metro Project.

According to Report, which refers to the bank, in November 2024, the EIB signed a Memorandum of Understanding (MoU) with the Ministry of Digital Development and Transportation of Azerbaijan during the COP29 in Baku to strengthen collaboration. The cooperation includes comprehensive technical assistance to be provided by the EIB and setting up a cooperation framework for the preparation and appraisal of the Project to upgrade, expand and modernize Baku's metro network.

The proposed EIB Framework Loan for Baku Metro is expected to include large-scale sub-projects such as:

• an upgrade and investments in performance improvement of the existing metro network;

• extension of the purple line including expansion of depot Khojasan;

• extension of the green line including construction of depot Darnagul;

• acquisition of rolling stock for the expansion of the network and increase of frequency on the existing lines.

The planned commencement of the assignment is February 2026, and it is expected to run for approximately 30 months. The EIB will be the contracting authority.

Total project cost as currently estimated by the Azerbaijani government is approximately 3 billion euros and the EIB may provide financing/loan up to 50% of the total project cost, subject to satisfactory appraisal. EIB intends to structure the project in tranches at the sub-project level.

As part of its support for the project preparation, the EIB, has secured or is in the process of securing the following technical assistance funds for the following scope of work:

• Urban Projects Finance Initiative (UPFI) grant for the preparation of the Climate Risks and Vulnerabilities Assessment (CRVA) and a Climate Adaptation Plan (CAP), including initial advisory support and capacity building to the project implementation team

• Eastern Partnership Technical Assistance Trust Fund (EPTATF) for the preparation of Environmental and Social Impact Assessment (ESIA), Environmental and Social Management Plan (ESMP) and Resettlement and Livelihood Restoration studies (depending on complexity), for one of the sub-projects of the investment programme.

• Neighbourhood Investment Platform (NIP) will be requested for assistance during project implementation, in terms of project management and supervision and specific sectoral expertise.

"The consultancy contracts for the above scope of works are expected to be procured the latest by the first half of 2026 and are expected to be delivered over approximately 18 months. Each of these assignments will have at least one lead consulting company that is expected to conduct the advisory work," says the EIB.

The Asian Development Bank previously expressed its willingness to provide Azerbaijan with a loan of up to $1 billion for the development of the Baku Metro CJSC. The Baku Metro had also reportedly attracted financing from the Asian Infrastructure Investment Bank.