Azerbaijan, Baku, 3 April /corr. Trend I.Khalilova / On 14 April, Michael Yantsik, head of the Financial Projects at KfW, will visit for three days in Baku to discuss the future plans on realization of the projects in financial sector of Azerbaijan, , Natig Abdullayev, the head of the KFW Baku office said on 3 April.
"No new documents will be signed during the visit because he plans to hold only the consultations," Abdullayev said.
The inter-governmental financial agreement has been prepared for 206-2007, which envisages allocating €10mln for the establishment of a Housing Fund and support to small and medium entrepreneurship.
The Housing Fund will be established within the project on modernization of the old buildings and houses. Some €3.5mln is planned to be allocated for the project and €500,000 for accompanying measures. The project is aimed at financing repair works to modernize old architectural buildings outside Baku.
To support the entrepreneurship via German-Azerbaijani Fund (GAF), KFW will allocate the third privilege loan in amount of €5mln and additionally €1mln as a grant for management of the Fund and payment of the services of manager - German Savings Bank Foundation for International Cooperation (SBFIC). Since 1999, KfW has provided €8mln to GAF.
In addition, KFW has approved €4 mln for the realization of the project on establishment of Credit Guarantee Fund (CGF), with €3.75mln as a guarantee for establishment of the Fund and €0.25mln for the payment of consultation services. The Fund will function as an 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.
The German Development Bank KFW has already begun the procedure of concluding an agreement with the consultant involved in the management of Credit Guarantee Fund (CGF). Azerbaijan's Ministry of Economic Development has also 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.
In addition, in the second quarter, KfW plans to begin the project on the financing of agriculture in the rural areas. The project is valued at 5 mln Euros. The discussion on the agreements will be held with the credit organizations, but the signing of the agreements is expected to take place during the course of first half of the year.
KFW has attracted two to three partners -including the banking and non-banking organizations. The German bank plans to allocate them the subordinate credits. The first stage will cover the rural areas in Sheki-Zagatala and Gakh regions. The terms of the credits will be similar to the terms of finance of the banks by German-Azerbaijani fund.
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