BAKU, Azerbaijan, May 25. New projects in the liberated territories of Azerbaijan can stimulate the development of the local debt market, Deputy Head of Research, Chief CIS economist at Russian Gazprombank Gulnara Khaidarshina told Trend.
"These projects are financed both from the state budget and from private investors. Given the significant financial needs and the exhaustion of credit limits in banks, companies plan to raise funds to finance projects in the capital markets. The absence of the need to provide collateral is an additional argument for placing bonds on the local market," Khaidarshina said.
She also stressed that potential issuers are striving to improve the quality of their financial statements.
"The need for financing infrastructure projects in the liberated territories is estimated between three billion manat ($1.76 billion) to four billion manat ($2.3 billion) per year, which is about 2.2-3 percent of GDP and opens up opportunities for placing green financing instruments," the bank’s representative explained.
Khaidarshina noted that foreign investors can also invest in securities of the Azerbaijani Finance Ministry through brokers both in the primary and secondary markets.
"Currently, work is underway to develop investment platforms in the secondary market. Cooperation with Euroclear and Clearstream is also being considered, but requires the expansion of the local debt market,” she also said.
Besides, according to her, the Ministry of Finance of Azerbaijan is cooperating with the World Bank on a Government Debt and Risk Management Program that promotes the development of a secondary market for government securities with the participation of the largest banks in Azerbaijan.
“The introduction of such a mechanism is expected to allow an increase in the volume of the local debt market," she added.