Conditions Determined for Crediting North-east Regions of Azerbaijan within IFAD Project
Azerbaijan, Baku / corr Trend I.Khalilova / The State Agency on agriculture loans of the Azerbaijani Agriculture Ministry and the International Fund for Agriculture Development (IFAD) coordinated the conditions on financing the farmers within the North Development Project.
MuganBank, TexnikaBank and TuranBank were chosen as the agent banks of the project.
Nazim Sadigov, the chairman of the board of TuranBank, said that the loan was given at the rate of 13% which is equal to the level of refinancing of the National Bank of Azerbaijan (NBA), whereas it was 7% within the first project of IFAD.
The key peculiarity of the project is that the agent banks must finance 34% of the cost of the project, and the rest 66% will be financed by the Azerbaijani Government and IFAD. Credit component in this project comprises $4.8mln.
The minimum amount of the loan for one project comprises $3,000 and the maximum is $25,000 that will be allotted for inter-farm ameliorative work. The term for a loan approval varies from 36 to 60 months.
According to Sadigov, TuranBank has presented two projects to the State Agency, but financing is still to be launched.
The IFAD project, which was unified in Baku on 27 July 2006, covers four north-east districts of the country, including Khizi, Siyazan, Devichi and Absheron districts.
The total budget of the project comprises $25.148mln amid initial t part of Azerbaijan $2,69mln. Government passed on co-financing from the OPEC Fund ($7.9mln), because the Fund increased its annual rate of Azerbaijan from 0.75% to 5%. The Azerbaijani Government decided to finance this part through the public budget. Within the project, some $10mln will be directed at melioration work, $6mln on establishment of the Association of Water Consumers, $4.8mln on crediting, and the rest on maintenance of the working group.