The stable outlook reflects S&P's expectation that the ceasefire agreement between Azerbaijan, Armenia, and Russia will broadly hold, underpinning a reduction in war-related security, financial sector, and balance-of-payments risks.

Periodic shootouts have increased along the border, where a kilometre here or a metre there apparently is enough reason to unleash heavy calibre weaponry

The bank said that the new forecast would also reflect an improved outlook for Armenia and Georgia.

More fighting on Azerbaijan-Armenia border, Baku says may enforce border on own

AIIB said that the loan would be co-financed with the  Asian Development Bank (ADB) as the lead co-financier.