Head of EBRD’s Baku Resident Office: EBRD is exploring the possibility of supporting Azerbaijan’s rapid infrastructure development

Could you specify the volume of the current European Bank Reconstruction and Development (EBRD) operations, which are now underway in Azerbaijan?

EBRD has been active in Azerbaijan since 1991. Since then we have invested about US$1.6 billion in 118 projects (including regional projects) in various sectors of Azerbaijan’s economy. Our current portfolio is around US$900 million of which approximately 46% is invested in the energy sector, 23% in the corporate sector, 18% in the financial sector and 13% in the infrastructure sector.

When will EBRD and Azerbaijan reach an agreement for additional fund allocations to modernize the transport system of Azerbaijan and for what amount?

EBRD is exploring the possibility of supporting Azerbaijan’s rapid infrastructure development. In the transport sector we have had preliminary discussions to support road rehabilitation, the railway investment programme and the construction of the ship yard. It is too early at this stage to disclose specific amounts and dates since we have not yet received an official request from the government but EBRD would be able to mobilise significant amounts of financing – comparable to what the World Bank and the Asian Development Bank have provided – in a relatively short timeframe possibly even this year.

What stage is the reconstruction project of «Garadagh Cement» company which is under implementation by EBRD loans?

In September 2009 EBRD extended a ˆ120 million loan to Garadagh Cement (part of the Holcim Group). The loan is part of a ˆ360 million project to modernize Garadagh Cement and expand its production capacity from 1.3 to 1.7 million tons of cement annually. As part of the project Garadagh Cement will introduce state-of-the-art dry process cement production technology which will significantly reduce energy consumption and CO2 emission. To date EBRD has disbursed ˆ65 million, construction is progressing and first clinker is expected by the end of the summer of 2011.

What amount the EBRD aims to implement the new projects in Azerbaijan for? When will these projects be implemented?

EBRD’s investments are project driven. There is no minimum or maximum amount for investments in any given year for any given country. Our mandate is to invest alongside investors in projects that meet our requirements. Based on our current pipeline, we hope to invest approximately US$100 million in 12 to 15 projects this year. We are currently assessing several projects in the agribusiness sector. Among others we are considering providing long-term debt financing to help expand existing production facilities at a food wholesaler and a soft-drink producer. We are also examining investment opportunities in the manufacturing and service sector. We are negotiating with a leading consumer goods retailer, a medical service provider and a company that provides chemical mixes for BP. The remaining projects will mainly consist of MSME credit facilities to local banks and microfinance institutions. Among the more noticeable transactions in the financial sector EBRD participated in Azerbaijan’s first convertible bond issue by Unibank in March 2011.


/APA/