The World Bank Board of Executive Directors approved the allocation of additional funding for the implementation of the Rail Trade and Transport Facilitation Project to the sum of $220 million at a meeting held on Thursday in Washington, a World Bank report released on June 27 said.

The project supports implementation of Azerbaijan's national railway development program aiming at improving railway services in the country, to develop the trade and attract transit cargo between Europe and Central Asia.

According to World Bank Regional Director for the South Caucasus Henry Kerali, the bank believes that additional financing to this project will help Azerbaijan to consolidate the process of modernisation of the railways.

Railway transport is an important element of Azerbaijan's economic diversification strategy. Income in this sector was equal to five percent of non-oil exports in 2012. By investing in railway infrastructure, Azerbaijan intends to achieve an increase in volumes of transit in the Central Asian and Black Sea regions, thus benefiting from the country's geographical location as the shortest route between Central Asia and Europe.

The initial amount of the project's funding from the World Bank amounted $450 million. Additional funding will be allocated for the modernisation of railway signalling system for the East West corridor from Baku to the Georgian border.

"The new system will allow to significantly improve the maintenance of a key transport corridor of Azerbaijan, reducing the traffic interval of trains up to eight minutes which will allow to increase network capacity by four times," the World Bank Senior Highway Engineer and one of the leaders of the project, Jacques Buré said.

The investment portfolio of the World Bank in Azerbaijan includes 17 projects. Since Azerbaijan's joining the World Bank, 54 projects worth more than $3 billion have been financed by the bank.