Azerbaijan finds manager for petrodollars

The World Bank's representative office in Azerbaijan said on Friday that nearly 7 percent of the capital of Azerbaijan's State Oil Fund (SOFAZ) had been placed into management of WB subsidiaries. It is the first case of a CIS state's handing over its stabilization fund into WB Group's management. By this transaction, SOFAZ intends to lower foreign currency risks of managing the fund, and to draw a new special-purpose credit of $20 million from the WB.

The State Oil Fund of Azerbaijan (SOFAZ) said on May 25th that it had placed $100 million into the management of the World Bank (WB). The transferred funds make up nearly 7 percent of SOFAZ total assets as of February 1st, 2007 (the fund has not yet published more recent data). The fund's total assets reach around $1.55 billion. Neither the WB, nor SOFAZ disclose the conditions of managing the money.

Azerbaijan is the fist CIS state to transfer a part of its money into WB Group's management, so as to avoid foreign currency risks: SOFAZ allocates a considerable part of its money in dollar assets.

The fund's largest social project in the long-term perspective is to clear the Apsheron peninsula from oil production waste. Azerbaijani government is in talks about drawing a special-purpose credit of $20 million from the WB for this project. Kommersant