German bank to increase funds for Azerbaijani energy sector

Azerbaijan, Baku, July 26 / Trend I. Khalilova /

The German KfW Development Bank sent proposals to the Azerbaijani government this week on financing the country's energy sector, KfW Baku Office head Natig Abdullayev said.

"The bank received an approval from the government on state guarantees for financing projects in this sector," he said. "We have prepared our financial proposals. According to the documents, KfW is ready to finance any projects in the energy sector."

Earlier the bank stated its intention to allocate a 40-million-euro loan to Azerbaijan to develop renewable and alternative energy sources. However, the amount was significantly increased in the proposal. Abdullayev refused to disclose the exact figure.

"We expect priority projects," he said. "These should aim to ensure energy efficiency."

Several energy projects could be financed with the bank's credit, Abdullayev added. The funds could also be used to finance any projects in this sector, such as, for example, the construction of a wind power plant, he stressed.

KfW is ready to fund projects through local banks. Specifically, the bank is interested in energy projects so long as it obtains a state guarantee.

KfW has financed several projects in the Azerbaijani energy sector, including the construction of power lines in Imishli. The bank allocated 30 million euro for the project. The credit was provided at a rate of 0.75 percent per annum for 12 years, with a two-year grace period.