Today.Az » Business » EBRD defines priorities for funding projects in Azerbaijan by 2014
09 December 2010 [17:07] - Today.Az
Azerbaijan has seen robust economic growth over the last three years, but it still faces major transition challenges across most sectors, according to the EBRD's new strategy for the country which runs from 2010 to 2013. The Board of EBRD has approved the strategy on Dec. 7.
The strategy analyses the country's progress in political and economic transition and outlines the Bank's priorities in Azerbaijan over the next three years. Priority areas will be increasing investments in the country's non-oil sector, as well as funding financial sector development and support for small business entrepreneurs. Another key priority will be policy dialogue with the authorities to implement reforms and improve the investment climate.
Over the past strategy period since 2007, Azerbaijan's economy grew by an average of 14.8% a year, driven by an oil and gas boom that accounted for 47% of GDP in 2009. The non-oil economy benefited from spill-over effects with the construction and service sectors growing respectively by 13.1% and 11.8% on average over the same period.
Over the medium term, GDP growth will remain largely dependent on developments in the oil and gas sectors. In 2010 GDP is expected to grow by 4%.
Olivier Descamps, the EBRD's Managing Director for Turkey, Eastern Europe, Caucasus and Central Asia, said Azerbaijan had already implemented reforms that were important for growth and the beginning of a recovery from the crisis within the non-oil economy was a positive sign. But he added that the progress of structural reforms had been uneven. Large transition challenges remained across most sectors of the country's economy.
To help speed up reforms and address some of the challenges facing Azerbaijan, the EBRD's activities will focus primarily on supporting private sector development in the country, and builing up a more attractive investment environment.
"The new document outlines the EBRD's continued support to the non-oil sector and business environment development. The Bank will continue to support the development of the financial sector, as one of its priorities, and assist Azerbaijan to diversify its economy by providing financing and technical assistance to Azerbaijan's corporate sector," Head of the EBRD Office in Azerbaijan said.
Specifically, the EBRD will support: industry, commerce and agribusiness sector; financial sector; energy and infrastructure sectors.
The Bank will pursue investment opportunities in all enterprise sectors with a special emphasis on agribusiness given its potential and importance in terms of regional development.
The Bank aims to strengthen financial intermediation to ensure efficient financing to the private sector particularly small and medium-sized businesses. The Bank will promote further competition and consolidation as well as foreign investment in the sector. The Bank will assist in the development of new financial instruments such as mortgage financing, leasing and energy efficiency credit lines. The Bank will enhance its support for the development of microfinance particularly in Azerbaijan's regions and promote the expansion of the non-bank financial sector. Alongside its investments the Bank will provide substantial technical assistance for capacity building, credit analysis and risk management.
The Bank will continue to support Azerbaijan's infrastructure development with a particular focus on power and energy savings.
The Bank is ready to consider contributing to the funding of the Nabucco Gas Pipeline Project. The Bank will promote transparent procurement practices in its projects. The Bank will also encourage commercial discipline and improve efficiency, financial transparency and corporate governance at its state-owned clients.
Since the beginning of its operations in Azerbaijan, the EBRD has invested about ˆ1.2 billion in 114 projects, with over 60% of the projects being investments into the development of the private sector.
/Trend/
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