Azerbaijan refuses from KfW's third preferential loan to develop entrepreneurship
Azerbaijan, Baku, September 5 / Trend I. Khalilova /
The Azerbaijani government refused from getting KfW German Development Bank's third preferential loan worth €5 million to support small and medium entrepreneurship in Azerbaijan, head of KfW's Baku office, Natiq Abdullayev, said.
"These funds were designated for financing small and medium entrepreneurship via German-Azerbaijani fund. But allocation of these funds was not approved," Abdullayev said.
KfW's loan was suggested to allocate to the National Entrepreneurship Support Fund under the ministry of economic development. But the National Entrepreneurship Support Fund has just passed the international audit to draw foreign borrowings.
KfW's mission has recently visited Baku to get familiarize with German-Azerbaijani Fund's activity by appreciating it as positive. "Experts of the bank said that the fund continues to fully operate despite limited opportunities in drawing additional loan resources. This fact is very pleasant," Abdullayev said.
He said that assimilation of the third loan via the National Fund is not discussed. At present, only technical aid is requested. Technical aid can not be given without further loan support upon KfW's policy.
Initially, KfW suggested Azerbaijan consolidated loan worth €20 million for development of entrepreneurship. About €5 million was envisaged as before at soft terms from the bank's funds. These terms include 40 years with delay of payment for 10 years and 0.75 percent annually.
The rest funds of loan (€15 million) must have been borrowed by KfW on the capital market. So, its terms were commercial.
The Azerbaijani government refused from commercial part of loan. But it has not agreed upon getting preferential loan.
German bank has allocated two trenches worth €8.7 million to German-Azerbaijani Fund since 1999. Their assimilation completed. At present, banks are financed from turret account and profit of the fund earned from beginning of activity. At present, German-Azerbaijani Fund's current portfolio hits €11.5 million.
Bank of Baku and UniBank are partners of German-Azerbaijani Fund since March 2001, Para Bank and Bank Respublika - since January 2003, Azerdemiryolbank and AG Bank - since September 2004, Rabita Bank and Mugan Bank - since December 2006 but Nikoil Bank - since February 2007.
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