Azerbaijan, Baku, 6 February /corr. Trend I.Khalilova / The German Development Bank KFW began the procedure of concluding an agreement with the consultant involved in the management of Credit Guarantee Fund (CGF), said the Head of KFW Baku Office, Natig Abdullayev, on 6 February.
According to him, Azerbaijan's Ministry of Economic Development approved the proposal of the bank to involve German Savings Bank Foundation for International Cooperation (SBFIC), as well as the list of the banks whose credits will be guaranteed via the CGF. In addition, KfW offers to attract as agent banks the GAF partner banks Bank of Baku, Bank Respublika, UniBank, Para Bank, Azerdemiryolbank and Azerigazbank.
The CGF may begin its activities in 2008, but the concrete date has not been confirmed because it depends on the contract signed with the SBFIC. It already has similar experience in other Caucasus countries.
KFW has approved €4 mln for the realization of the project, with €3.75mln as guarantee for the establishment of the Fund and €0.25mln for payment of consultation services. The Fund will function as accountant in KFW's headquarters. In the event of appeals from Azerbaijani banks, the Fund will inspect them and appeal to KFW for a guarantee, Abdullayev said.
Azerbaijani banks may borrow from international banks on the basis of credit terms of KFW who possess AAA+ rating. In the first stage, the amount of the Fund will total €2.3 mln. The Credit Guarantee Fund has no limitations in attracting credit lines, but in the first stage, the amount of the guarantee will not exceed €500,000. Whilst attracting KFW guarantees, the banks cannot give loans exceeding €150,000.