The project is designed to create safe water source with uninterrupted water supply for Baku and Sumgayit, eliminate existing energy consumption in current water transport and instead of this generate 25 MVT of electricity.

In compliance with the Ordinance of the Cabinet of Ministers of the Republic of Azerbaijan No. 42s, dated February 24, 2006 project management and executing functions of the reconstruction of the Samur-Absheron irrigation system project are entrusted to the Azerbaijan Joint Stock Company of Melioration and Water Economy (AMWE JSC). Working Group was established on purpose to ensure project management in accordance with the Ordinance of the Cabinet of Ministers of the Republic of Azerbaijan No.411s, dated December 23, 2005.

"Long Term Strategy and Feasibility Study for the Samur-Absheron Canal System" was prepared by Japan Company "Nippon Koei" and local company "Sulako" in 2004.

Under the contracts, the total amount of allocations for financing this project from SOFAZ equaled 1 469.6 mln. manats throughout 2006-2018.

Execution of this project is being implemented within the frame of the following works according to the orders of Azerbaijan Joint Stock Company of Melioration and Water Economy:

I stage:

1. Total amount of allocations for financing the "Construction of Takhtakorpu water reservoir with hydroelectric power station" is 564.7 million manats, including 0.1 million manats were allocated for “Preparation of tender documents and technical project of Takhtakorpu water reservoir with hydroelectric power station”, 2.4 million manats were allocated for “Payment of compensations”, 7.99 million manats were allocated for “Constaction of access roads”, 1.5 million manats were allocated for “Building 70 houses in Gulamli district of Shabran (Devechi) region”, 20.0 million manats were allocated for "Relocation main gas and oil pipelines", 532.7 million manta were allocated for “Construction of Takhtakorpu water reservoir with hydroelectric power station”.

2. Total amount of allocation for financing the"Construction of Takhtakorpu-Jeyranbatan water canal" is 406.2 million manats, including 1.7 million manats were allocated for “Preparation of technical and tender documents”, 2.8 million manats were allocated for “Payment of compensations”, 401.7 million manats were allocated for “Construction of Takhtakorpu-Jeyranbatan water canal”.

3. For the “Construction of “Velvelechay-Takhtakorpu canal" credit agreement amounted USD 42.6 million signed between Azerbaijan government and Islamic Development Bank, Saudi Fund For Development and OPEC Fund for International Development. SOFAZ finances part of construction of Velvelechay-Takhtakorpu canal from the IV quarter of 2009. Under this contract 167.0 million manats were financed by the State Oil Fund. All of the amount under this contract was used.

On September 28, 2013 at the official opening ceremony with participation of the President of the Republic of Azerbaijan Ilham Aliyev Takhtakorpu water reservoir, Takhtakorpu hydro power plant and Takhtakorpu-Jeyranbatan water canal were set to exploitation. With the Ordinance # 019U dated May 8, 2014 by AMWE JSC State Comission was established for handing over the project and with the Act of this Comission dated November 12, 2014 Takhtakorpu water reservoir including hydro power plant, roads leading to Takhtokorpu water reservoir, Velvelechay-Takhtakorpu, Takhtakorpu-Jeyranbatan canals were set to explotation.

II stage:

4. “Construction of diversion works and water channels on northern rivers”

At one of the important stages of the the "Samur-Absheron irrigation system reconstruction" project, there has been a need for the construction of reservoirs and transport channels on six mountain rivers (Gusarchay, Gudyalchay, Jagacuchachi, Agchay, Guruchay and Garachay) in the recent years. Due to the reduction of water resources in the Samur river, the construction of irrigation systems and transport channels in Garachay and other rivers had to begin without delay and so the construction works on three rivers (Gusarchay, Gudyalchay and Caqacuqchay) were completed at the expense of the State Oil Fund in 2017.

4.1.Preparation of technical and tender documents. In accordance with the Procurement procedures on preparation of tender documents and technical project of this project the contract amounted to 3.4 mln. manats was signed between "Temelsu" company and Azerbaijan Joint Stock Company of Melioration and Water Economy on October 30, 2013. All amount under this contract was totally used.

4.2.“Construction of water intake facilities and water transmission canals on Northern rivers” (starting with Gusarchay, Gudyalchay and Jaqajuq rivers). In accordance with the procurement procedures a contract in the amount of 56.3 mln. manats was signed between Azerbaijan Melioration and Water Economy JSC and Euro-Asia Construction Corporation “Evrascon” OJSC on June 30, 2014. In total 53.1 mln. manats were allocated under this contract.

4.3 “Construction of diversion works and water channels on northern rivers” (through Garachay river)

“AMST” ASC and “Korpu-Bina-Tikinti” LLC signed a contract amounting to 18.9 mln. manats on July 2, 2018. For the fourth quarter of the fiscal year 18.0 mln. manats were allocated under this contract.

5. Improving water supply system of existing irrigated lands and commissioning of newly irrigated lands in Shabran, Siyazan and Khizi districts

5.1.Preparation of technical and procurement documents. In the second quarter of 2014 new unit was included into the project. Azerbaijan Melioration and Water Economy Joint Stock Company and Turkish international engineering services “Temelsu” signed a contract regarding the preparation of working-project and tender documents with total amount of AZN 8.95 million. All amount under this contract was used.

5.2.Improving water supply system of existing irrigated lands and commissioning of newly irrigated lands in Khizi district and construction of canal for joining with Samur-Absheron canal. AMWE JSC and "Evrascon" OJSC signed a contract amounting 89.4 million manats in November 12, 2014 for procurement of the works related to this project. The amount of the contract was increased to 91.3 mln manats in July 10, 2018. In total 78.5 mln manats were allocated under this contract, including 4.0 mln manats during the fiscal year.

5.3. Improving water supply system of existing irrigated lands and commissioning of newly irrigated lands in Siyazan. AMWE JSC and “Korpu-Bina-Tikinti” LLC signed a contract amounting to 6.9 mln. manats on January 14, 2015 (I stage) and a contract amounting 61.3 million manats on June 04, 2015 (II stage) for procurement procedures. The works on I stage was finished on September 2,2016. Amount of the contract for the second stage was increased to 67.4 mln manats. In total 67.4 mln manats were allocated under this contract, including 902.6 thousand manats during the fiscal year.

5.4.Construction of SAK feeding-joining canal in the frame of the "Improving water supply system of existing irrigated lands and commissioning of newly irrigated lands in Shabran, Siyazan and Khizi districts" project. AMWE JSC and "Evrascon" OJSC signed a contract amounting 4.7 mln. manats in August 14, 2015 for procurement of the works related to this project. In total, 4.4 million manats were allocated under this project. SOFAZ made no allocations under this project during the year 2018.

5.5.Consultancy services for “Construction of water intake facilities and water transmission canals on Northern rivers” and "Improving water supply system of existing irrigated lands and commissioning of newly irrigated lands in Shabran, Siyazan and Khizi districts" projects. AMWE JSC and Turkish international engineering services “Temelsu” signed a contract amounting 3.2 million manats for procurement of related works on August 27, 2014. In total, 2.1 mln manats were allocated under this contract, including 0.7 mln manats during the fiscal year.

5.6.Improving water supply system of existing irrigated lands and commissioning of newly irrigated lands in Shabran. “Azneftmash” and AMWE JSC signed a contract dated September 9, 2016 in the amount of AZN 228.4 million. Amount of the contract was increased to 251 mln manats. SOFAZ has allocated 107.9 million manats under this contract in total, including 54.8 mln manats during the year 2018.

5.7.Improving water supply system of existing irrigated lands and commissioning of newly irrigated lands in Khizi and construction new connecting bridge. The contract dated July 28, 2016 in the amount of AZN 9.9 mln. was signed between “AMST” JSC and “Avro-Asia Construction Corporation. SOFAZ has allocated 9.4 mln manats under this contract, including 7.0 mln manats during the year 2018.

6.Supporting of Working Group

5.2 mln. manats, including 477.2 thousand manats during year 2018 were used for supporting the Working Group.