Press Release

OFID signs US$5 million line of credit with Azerigazbank of Azerbaijan

17/2009 April 2, 2009 baku, Azerbaijan
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The OPEC Fund for International Development (OFID) yesterday signed a US$5 million line of credit agreement with the Azerigazbank of Azerbaijan. The agreement was signed at the Ministry of Finance of Azerbaijan by Mr. Suleiman J. Al-Herbish, OFID Director General, and Mr. Chingiz Asadullayev, Chairman of the Supervisory Board of the Azerigazbank. Also present was HE Mr. Samir Sharifov, Minister of Finance of the Republic of Azerbaijan, other officials from the Ministry of Finance and various representatives from the Azeri press. The line of credit will be used to provide medium-term funding to small and medium-sized enterprises (SMEs) in Azerbaijan.

Referring to the line of credit, Mr. Al-Herbish noted that the agreement would help cement the fruitful relationship between the two institutions. OFID and the Azerigasbank became partners in development in December 2008, when support was extended to the bank under OFID’s Trade Finance Facility in the form of guarantees. This was done under EBRD’s (European Bank for Reconstruction and Development) risk-sharing program. Mr. Al-Herbish said that OFID hoped this guarantee would “provide a higher headroom for trade business.” The Director-General thanked Mr. Asadullayev and his colleagues for their cooperation in carrying out the latest transaction. Also, Mr. Al-Herbish said OFID was confident that its lending activities in Azerbaijan would continue to grow, thereby “reflecting our ongoing commitment to working with our partner countries.”

Furthermore, Mr. Al-Herbish expressed satisfaction with OFID’s continuing relations with Azerbaijan, which began in 2003 with a first public sector loan to help boost the country’s transportation sector. The Director-General referred to the signing of a second public sector loan to benefit Azerbaijan’s agriculture sector. He also spoke of OFID’s active role in supporting the country’s private sector, which included the extension of three lines of credit to various other Azeri banks.

In his response, the Minister thanked the Director-General adding that, the project was important to the country’s private sector. Continuing, the Minister said the project was very relevant, given the current global financial situation, which has affected Azerbaijan’s economy, although not as severely as those of other countries. Mr. Sharifov explained that through this latest line of credit, OFID and Azerigasbank were sending a strong message of confidence to the Azeri banking sector.

In conclusion, Mr. Asadullayev of the Azerigazbank conveyed his appreciation for the solid cooperation between OFID and his bank, which led to the formulation of the present agreement. He said he looked forward to strengthening the relationship through future initiatives.

A major hurdle facing SMEs in Azerbaijan is the lack of access to finance, despite the fact they account for 80% of registered private businesses in the country. They also have generated, on average, an estimated 10% of the Gross Domestic Product over the past five years. SMEs are also the biggest source of domestic employment outside of the public sector, providing livelihood for over three-quarters of Azerbaijan’s workforce.

 

Arabic version