IFC finances its first energy efficiency project in Azerbaijan

Source: AzerNews

The International Finance Corporation (IFC), a member of the World Bank Group, has signed an agreement with Azerbaijan's Bank Respublika on a $15 million loan to finance energy efficiency projects, a report of the Baku office of the corporation said on July 29.

IFC will help the bank to create new projects in the area of financing energy efficiency. Trainings on raising the awareness of the bank's employees on new possibilities in the market and evaluating the projects on energy efficiency will be conducted as well.

This loan is the first IFC project in this field in Azerbaijan. The project is a part of IFC's financing sustainable energy in Europe and Central Asia, supported by the Austrian Finance Ministry.

With a total project cost of $15 million, IFC will provide $14 million of its own money, and $1 million from Canada Climate Change Program.

IFC approved the first loan to Azerbaijan to finance renewable energy and energy efficiency (RE/EE-credit) projects in May 2013.

Chairperson of Bank Respublika executive board Khadija Hasanova said at the signing of the agreement that Bank Respublika has positive experience of working with IFC since 2007.

"We are particularly interested in cooperation with the corporation in this new sphere, as this will provide the possibility to present new bank products to the market, which in its turn will allow increasing clients' awareness about energy efficiency," she said.

Permanent representative of IFC in Azerbaijan Aliya Azimova said in turn that promoting energy efficiency is a part of IFC's strategy for impact on climate change.

"Cooperating with Bank Respublika in this sphere, we want to demonstrate that the financing of sustainable energy is a profitable business for both financial institutions and for borrowers. This creates opportunities for the introduction of modern technologies, reducing energy costs, improving efficiency and competitiveness," she said.

Azerbaijan became a member of IFC in 1995. Since then IFC has invested almost $393 million and leveraged nearly $73 million from other lenders under 67 projects in financial services, infrastructure, and manufacturing.

IFC has also implemented advisory projects focused on private sector development. In addition, the State Oil Fund of the Republic of Azerbaijan (SOFAZ) has committed $350 million to three funds managed by IFC Asset Management Company that invest alongside IFC in private sector projects in emerging markets.

IFC is the largest global development institution focused exclusively on the private sector. It helps developing countries to achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, IFC investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world's most pressing development challenges.

Bank Respublika has been operating since 1992 and is one of the leading banks of Azerbaijan. Among its shareholders are two large German financial institutions - DEG, a member of KfW banking group, and SIDT, a member of Sparkassen-Finanzgruppe, with a share in the bank at a rate of 25 percent + 1 share.

Bank Respublika has a B2 rating with "stable" forecast by the international rating agency Moody's Investors Service.