World Bank-backed project paves way for Azerbaijan’s tolling strategy

Azerbaijan is on the verge of completing a major infrastructure initiative aimed at boosting regional connectivity and trade, with the World Bank confirming substantial progress under the Regional Connectivity Development in Azerbaijan project.

As of July 1, 2025, $63.1 million—representing 97.08% of the total loan amount—has been disbursed from the $65 million credit provided by the International Bank for Reconstruction and Development (IBRD), a member of the World Bank Group, Caliber.Az reports via local media.

The project, launched in December 2021 with a total budget of $96 million, is set to conclude by March 31, 2026. Its primary objective is to establish a safe, efficient, and climate-resilient transport network along the critical Salyan-Bilasuvar section of the M3 highway, which links Alat and Astara—an important trade corridor in the South Caucasus.

According to the World Bank report cited by Report, the effective implementation of the project has not only accelerated progress but also resulted in cost savings. These funds have been redirected toward the rehabilitation of additional infrastructure. Under the "Road Connectivity" component, construction has been finalized across all project segments, including the expanded scope of works: 67.35 kilometres of roads were reconstructed, 2.53 kilometres repaired and resurfaced, 1.3 kilometres of new wear-resistant pavement laid, and 10 bridges constructed.

In June 2025, the Azerbaijani government formally requested that the remaining $2.3 million in undisbursed loan funds be allocated to reconstruct two aging bridges located at the 193 km and 197 km points of the M3 highway, in the Lankaran and Masalli districts. These structures have been deemed structurally deficient and economically nonviable for repair. The reconstruction works are expected to be completed within 6–7 months, well ahead of the project’s official closing date.

The proposed works will be carried out by the same contractor responsible for the initial phases of the highway reconstruction, under the existing contractual framework—an approach endorsed by the project’s procurement unit.

The World Bank has expressed strong support for this strategic pivot. Initially, the remaining funds were earmarked for small-scale roadside market infrastructure. However, the project’s growing impact—spurring traffic growth and catalyzing private investment in logistics and service facilities—has eliminated the need for additional public funding in that area. As a result, resources will be channeled toward critical structural improvements to enhance long-term corridor functionality.

The reconstruction of these bridges is crucial for advancing the project’s broader goal: transitioning the upgraded M3 highway into a toll-based route while retaining the rehabilitated older highway as a no-cost alternative. This dual-road strategy forms the backbone of Azerbaijan’s National Road User Charging Strategy, developed under the project’s Road Sector Sustainability component.

In addition to physical infrastructure upgrades, the project includes technical assistance to enhance Azerbaijan’s road management capacity. This involves the deployment of Intelligent Transportation Systems (ITS), implementation of axle-load monitoring, and the development of a national tolling framework. These efforts are being supported by Swedish National Road Consulting AB, which is advising on road network governance, ITS integration, toll system design, and regulatory mechanisms.

The World Bank notes that implementation is now at an advanced stage. Key technical reports have been finalized and are undergoing review. Final consultations with Azerbaijani government stakeholders are expected by December 2025.

By Vafa Guliyeva