Azerbaijan said Thursday it will disburse a $200 million loan to Georgia to finance the building of a South Caucasus railroad link, RIA Novosti reports.
The $422 million Baku-Tbilisi-Kars railroad project will link Azerbaijan with eastern Turkey through Georgia.
The project will be financed through the Azeri oil fund.
The Baku-Tbilisi-Kars project also aims to build a new railroad offshoot 105 kilometers (65.2 miles) long, including 76 kilometers (47.2 miles) on Turkish territory, and 29 kilometers (18 miles) on Georgian territory.
Under the project, Georgia will also modernize a 183-kilometer (13.7-mile) section of the Akhalkalaki-Marabda-Tbilisi railroad to boost its cargo capacity to 15 million metric tons per year.
The Baku-Tbilisi-Kars project is expected to be completed within the next two or three years, and the construction of the accompanying infrastructure will push up its cost to $600 million.