Azerbaijan becomes EBRD donor country

By Azernews

By Rasana Gasimova

Azerbaijan and the European Bank for Reconstruction and Development (EBRD) have signed the contribution agreement by which the country joins the Bank’s donor community, thereby further strengthening its cooperation with the Bank.

The document was signed by the EBRD President Suma Chakrabarti and Azerbaijan’s Prime Minister Ali Asadov during the first Eastern Partnership Investment Summit held in EBRD London headquarters on November 23.

Donor governments and partners make a vital contribution to the EBRD’s work by providing funds that act as a catalyst for the Bank’s investments and support its other activities in countries from central Europe to central Asia and, the southern and eastern Mediterranean region.

A $2 million grant contribution from the Ministry of the Economy of Azerbaijan will support EBRD projects in a wide range of sectors to help diversify the country’s economy, promote the development of private businesses outside the oil sector, enhance innovation and boost exports.

The new funds committed by Azerbaijan will be used to support small and medium-sized enterprises (SMEs), especially in the agribusiness sector, and businesses led by women, to promote innovation and new technologies, rural and regional development as well as sustainable and renewable energy in projects that enhance energy efficiency.

The grants will also support advisory projects and investments in transport and municipal infrastructure, such as solid waste management. They will also support policy reform in a move to provide strategic guidance to further strengthen Azerbaijan’s economy.

The funds can be deployed in the form of investment grants, incentives payments and risk sharing facilities.

The EBRD is one of the leading institutional investors in Azerbaijan, where it focuses on supporting efforts to diversify the economy and develop the private sector. The country has been cooperating with EBRD since 1992 to achieve further economic development. One of the main priorities of EBRD in Azerbaijan is to support the local corporate sector with direct financing. EBRD continues to pursue investments in energy projects, especially where there is a gap to improve efficiency and energy security.

In total, Bank has allocated almost 3.3 billion euros for projects in various sectors in Azerbaijan. The largest share of investments account for the energy sector (50 percent), while 42 percent accounts for infrastructure projects. The rest is for financial, industrial and commercial projects.

The Bank’s largest loans include financing the construction of the Trans-Anatolian Pipeline ($500 million) and the development of Shah Deniz 2 ($1 billion).

Presently, EBRD pays special attention to the development and financing of renewable energy projects in Azerbaijan. The Bank is also interested in the development of SMEs and financial sector in the country while helping the economy to diversify further.

To date, the EBRD has invested €3.3 billion in 168 projects in Azerbaijan.