Azerbaijan, Baku, Feb. 7 / Trend , I.Khalilova /
The commercial banks- partners of the World Bank's project the second phase of development and agricultural lending worth 58 million dollars will be provided technical assistance. The State Agency on Agricultural Lending of the Ministry of Agriculture announced a tender to attract a consultant
Those interested companies may submit their proposals to the group managing the project until Feb. 18. The consultant will be selected in accordance with the rules of the World Bank. Applicants should provide information about services, work experience under certain conditions, the availability of relevant knowledge and skills, CVs and etc.
The consultant should provide up to four experts for the training. They should bring the course materials to local conditions to be used in Azerbaijan, to conduct training programs for financial institutions - the project participants in accordance with the international consultants program as well as the organization of seminars conducted by consultants in line with international experience and technical support should be provided.
The project was commenced in January 2007, and it is the second phase of the ten year development and agricultural lending program. The main objective of the project is to support the business of farmers, small and medium-scaled agricultural enterprises, service providers in the agricultural sector, including improving the productivity and profitability by enhancing access to financial services and encourage investment in rural areas.
The loan component of the project is 15 million dollars, of which 9.7 million will be directed to micro credit, and the rest - on commercial terms would be distributed through the agents- banks. Micro-credits will be issued for one year without collateral, so bid on them will be within 20-25 per cent. The maximum loan size is 1,000 dollars to be allocated in three tranches.
Loans will be issued through credit unions and authorized banks, like Texnika Bank, Turan Bank and Mugan Bank. 30 credit unions created in the first phase of the project, while the second provides an additional 20.
Loans will be issued through banks with 11-12 percent of interest rate (taking NBA's 5 percent of interest rate and 6-7 percent of margin) with a maximum term to 5 years. Amount of loan for one project will make up $300,000 maximum.
It is planned to expand number of regional consulting centers from 5 to 10 which was formed as part of the WB's first project.
From total cost of the project at $58 million, some $28.5 million falls on the WB loan (A total of $20.5 million will be allocated through the International Development Association, $8 million - through toughened conditions of MAP which will cover 35 years with 10-year delay and libor-2 interest rate). The remained part of the project will be financed via the Japanese grant at $1.6 million, revolving fund at $9.6 million which was formed during the project's first phase. Some $7.8 million falls on the government.
The project comprises two components. The first component costs $42 million to support agricultural business-services. Under the component, it is planned to strengthen financial services in the country's regions, particularly activity of loan unions which were formed as part of the program's first phase. Moreover, it is planned to strengthen potential of local banks, support leasing companies, information and marketing services. It is expected to render technical assistance for it.
The second component costs $14 million and envisages increasing agricultural production and efficiency, expanding consulting services, strengthening opportunities to use veterinary services and introducing new agricultural technologies.
The project covers four years. The WB Board of Directors approved the project on June 29 in 2006 and a loan agreement was inked on Oct. 5 in 2006.
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