Azerbaijan's railways set for digital overhaul with ADB's $47M loan

The Asian Development Bank (ADB) has approved a $47 million loan to Azerbaijan for the digital transformation of the Azerbaijan Railways Closed Joint-Stock Company (ADY).

According to Report, the funds will help Azerbaijan digitize its railway system, enhancing the safety, reliability, and efficiency of the country's rail networks.

The project aims to support the digitization of ADY's key processes, including railway transportation management, asset management, investment planning and management, as well as the digitization of customer data processing and corporate functions.

Eugene Zhukov, ADB Director General for Central and West Asia, emphasized the importance of this initiative, stating that a modernized and digital railway system will support Azerbaijan's key role in connecting the economies of East and Central Asia with the Caucasus and Europe.

He said the bank is pleased to support this initiative, which will help Azerbaijan maximize its powerful potential as a trade and connectivity hub.

The ADB believes that digitization is critical for improving operational efficiency, enhancing competitiveness, and fully utilizing Azerbaijan's role in regional transit corridors. This transformation will also improve ADY's operational and financial performance through optimized data management, asset management, and overall railway operations.

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 due to aging infrastructure and limited digitalization.

“Digitalization is critical to enhancing operational efficiency, improving competitiveness, and fully leveraging Azerbaijan's role in regional transit corridors,” said 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 six key economic and trade corridors that crisscross 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.

Azerbaijan has been a member of the ADB since 1999. Over the course of their cooperation, the bank has provided the country with more than $5 billion for the implementation of projects in the public and private sectors.