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EBRD and EU support broadband expansion in Azerbaijan

4 Jan 2023

The European Bank for Reconstruction and Development (EBRD) is providing a loan of up to USD50 million to state-owned operator AzTelekom to finance the rollout of fibre-to-the-home (FTTH) broadband infrastructure to more than 280,000 households in the regions of Azerbaijan. Baku Telephone Communication (Baktelecom) will act as co-borrower along with AzTelekom.

The planned network expansion will improve speed, capacity and bandwidth, bridging the digital divide between the capital and rural areas, and will be implemented within the framework of the government’s ‘Online Azerbaijan’ project, which aims to extend high speed fixed broadband coverage nationwide by the end of 2024. Approximately 766,000 households have gained access to GPON-based fibre-optic networks since the programme’s implementation in 2017, with some 539,000 homes passed in 2021-22 under an accelerated deployment programme.

The financing will be the first EBRD transaction in the sector and be supported by a guarantee through the European Fund for Sustainable Development Plus (EFSD+). The loan is being provided as part of the EU’s Economic and Investment Plan for the Eastern Partnership, which – complemented by support for reforms and good governance – aims to deliver tangible benefits to citizens by generating jobs and economic investment across the region. Additionally, the EU is set to grant a further EUR1 million (USD1.06 million) as part of the EFSD+ guarantee to the Ministry of Digital Development and Transport to enable the implementation of institutional measures to improve competition and regulation in the telecommunications sectors, as well as to strengthen the borrowers’ corporate governance.

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