Today.Az » Business » EBRD, Azerbaijan agree to cooperate for effective reforms
11 September 2017 [16:15] - Today.Az
By Sara Israfilbayova
The European Bank for Reconstruction and Development (EBRD) is eager to further cooperate with Azerbaijan, for which its loan portfolio is about $3 billion.
The issues of cooperation and ongoing reforms were mulled during the recent visit of EBRD President Suma Chakrabarti to Azerbaijan. The main purpose of the visit was to discuss the ways to further strengthen Azerbaijan’s economic performance.
During a meeting with President Ilham Aliyev on September 7, there were frank talks about the political and economic environment, as well as the continuing need to pursue reform and diversify the economy, the bank reported.
The head of state underlined the importance of Chakrabarti's visits to Azerbaijan, adding that these visits create a great opportunity for discussing future plans.
President Aliyev noted that the EBRD's loan portfolio in Azerbaijan is about $3 billion, praising the fact that its major part is being channeled into the private sector. He described this as a clear manifestation of the expansion of the private sector of Azerbaijan's economy.
The exploration of these themes continued in further meetings with government ministers.
Economy Minister Shahin Mustafayev, addressing a meeting with Chakrabarti, mentioned that the EBRD allocated $1.7 billion for implementation of 151 projects in the country since the beginning of its cooperation with Azerbaijan.
Mustafayev added that Azerbaijan attaches great importance to cooperation with the EBRD.
The EBRD's efforts in Azerbaijan aim to help diversify the economy away from a dependence on energy and natural resources. The Bank has invested in many smaller, private sector non-energy projects. They each have a positive impact in helping to build the private sector and enhance skills.
The Bank allocated over €294 million since the beginning of cooperation to support small and medium-sized enterprises (SMEs) in Azerbaijan. It also provided €233 million in indirect finance, supporting an SME lending portfolio of banks reaching over 94,000 micro, small and medium-sized enterprises annually.
More than 850 SMEs in Azerbaijan have received consulting assistance since 2003, including assistance to improve accounting, to enter new markets, and work under the Women in Business program, whose goal is to provide financial and consulting assistance to companies run by female entrepreneurs.
Sixty eight per cent of the Bank's investment in Azerbaijan is in the private sector - a crucial part of civil society.
Chakrabarti, during his visit to the municipal solid waste incineration plant in Baku, stressed that the EBRD is interested in cooperating with Azerbaijan in the sphere of domestic waste management.
He pointed out Azerbaijan’s success in the sphere of domestic waste management.
The EBRD President visited the Balakhany landfill for solid waste disposal and also familiarized himself with the conditions created around the Boyukshor lake.
The EBRD Board of Directors plans to approve a loan for Azerbaijan’s Tamiz Shahar JSC on November 1, established to improve the ecological condition of Baku.
A loan in the amount of up to $39 million will be allocated for financing investments in the solid domestic waste management in Baku and adjacent settlements on the Absheron peninsula (“Big Baku”). The funds will be used to finance the construction of two transfer stations and sorting facilities, which will allow optimizing the transportation of waste and reducing the volume of its utilization.
The project’s goal is to improve the efficiency of solid domestic waste management in Big Baku. Total cost of the project is $39 million. In total, the EBRD, together with the technical assistance, will allocate $40.3 million for the project.
In addition, Chakrabarti and Deputy Energy Minister Gulmammad Javadov signed a memorandum of intent on Strategic Road Map for the development of utilities in Azerbaijan.
Javadov gave information about the progress of work within the Strategic Road Map for the development of utilities and noted that one of the most important priority areas is creating a central body that will play a bridging role in the effective regulation of the energy sector.
Chakrabarti, in turn, noted that EBRD has extensive experience in the energy sector and 30 percent of the bank's investment is invested to this area, noting that the Bank intends to increase this share up to 40 percent in the future.
The EBRD is an international financial institution founded in 1991. As a multilateral developmental investment bank, the EBRD uses investment as a tool to build market economies.
One of the main priorities of the EBRD in Azerbaijan for 2017 is support the local corporates with direct financing. The EBRD continues to pursue investments in energy projects, especially where there is a gap to improve efficiency and energy security.