Azerbaijan, Baku, July 21 / Trend I. Khalilova /
World Bank (WB) is considering the allocation of $5-10 million to develop capital market in Azerbaijan, the bank's Baku representation said.
"At the moment the project is under preparation. Afterwards, the final amount of the loan, which will not exceed $10 million, will be determined," the representation said.
A concessional loan worth $ 73 million is likely to be allocated from the quotas of the International Development Association (part of the WB group) for Azerbaijan in 2011 to finance this project.
The Swiss State Secretariat for Economic Relations (Seco), which is involved in projects with the World Bank, has approved the first stage of providing funding for the program of modernization of Azerbaijani financial sector, head of a national program of the Swiss Cooperation Office for the South Caucasus Naila Safarova said.
This program includes three projects - further development of the national postal operator Azerpoct's activity, strengthening of capital market players' potential and protection of users of financial services.
She also said that these projects will be implemented jointly with the World Bank.
It is planned to implement the project of capital market development by late 2010. Currently, the program First Initiative, funded by various international donor agencies and World Bank, conduct refinement of design project. In general, the State Committee for Securities has reached an agreement with First Initiative on the financing and technical support in preparing the strategy for capital market development in Azerbaijan.
The State Committee for Securities and international experts planned to finalize the strategy for capital market development in Azerbaijan during 2011-2015 and the medium-term plan for its implementation during April-June this year as part of this project. Project for Improvement of Capital Market includes the provision of large-scale technical assistance to implement this strategy.
However, according to experts, about $4-5 million will be required for the implementation of such a massive project, which will cover systems of National Depository Center, professional securities market participants, purchase of licensed software along with improvement in the trading system of Baku Stock Exchange.
The WB has been cooperating with the Azerbaijani government since 1992. When the country became a member of the World Bank, the Bank has funded 52 projects amounting to $2,7 billion. More than $1,5 billion were mastered.