Azerbaijan, Baku, September 3 / Trend N. Ismayilova /
The Central Bank of Azerbaijan has allocated a loan worth 750 million manat to SOCAR (State Oil Company of Azerbaijan), Chairman of the Bank's board, Elman Rustamov, said on September 3.
"450 million manat will be spent to pay off a foreign loan drawn for various projects and the rest of the money is intended to finance SOCAR's energy projects", Rustamov said.
The Central Bank has allocated the loan at a rate of 3 percent per annum for seven years, two years of which are favorable. During this period only percents will be paid. Besides percents, 150 million manat will be paid annually in the next five years.
"SOCAR has drawn the loan at a rate 2-3 times more than the bank's rate," Rustamov said.
The Central Bank's loan was allocated through the International Bank of Azerbaijan and under state guarantee. Rustamov explained that the recent reduction of foreign exchange let the Central Bank make these payments.
The head of the Central Bank thinks that the increase in oil prices on world markets will improve the financial position of the State Oil Company.
From 2010 the company will pay off foreign borrowings and pay back $420 million, SOCAR's Vice-President for Economic Affairs, Suleyman Gasimov, said.
On March 24, 2006 a syndicated loan agreement was signed between the French bank BNP Paribas SA and Azerbaijan ACG Ltd, owned by SOCAR and managing its shares (10 percent), in agreement with the PSA on the offshore Azeri-Chirag-Guneshli fields in the Azerbaijani sector of the Caspian Sea.
The loan was $750 million. The role of BNP Paribas was to grant the loan, and then share it between the syndicate parties, which includes 15 leading international and European banks.
Thanks to the syndicated loan, SOCAR (AzACG Ltd) managed to regain expensive oil, which it can sell independently now. Before, the loan was financed by ExxonMobil and SOCAR TPAO, who had been brought in in 1994 to finance SOCAR's commitments in PSA.
The agreement with BNP Paribas SA, concluded without state guarantees or other deposits, allowed SOCAR to continue independently drawing funds from global capital markets at acceptable rates.
The Vice-President said that SOCAR plans to pay off loans to Azerbaijani banks, including Xalq Bank and the International Bank in 2009. Lends were drawn from these banks for one year.
$80 million was drawn from IBA and $40-50 million from Xalq Bank. Loans were drawn from local banks to construct an underground pipeline through the seabed.
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