Azerbaijan, Baku, April 26 /Trend, I.Khalilova/
The delays in the provision of guarantees via Loan Guarantee Fund (LGF), acting in Azerbaijan, is related to the expiration of the contract with the consultant - manager of LGF - German Savings Banks Foundation for International Cooperation (SBFIC), the Baku office of the German Development Bank KfW said on Tuesday.
"To extend the term of the contract, it is necessary to attract financing for consultancy services, KfW Baku office said. - As the Ministry of Economic Development of Azerbaijan has refused to pay these expenses from the Fund of Research and Experts, currently the issue to attract funding from other sources is being considered.
The agreement on financing the Fund created by KfW was signed August 14, 2006 at the Azerbaijani-German intergovernmental negotiations in Bonn, and an intergovernmental agreement on financial cooperation on establishment of GCF in Azerbaijan was signed by the country's President June 5, 2007.
In August 2008, KfW signed a contract with Azerbaijan's Ministry of Economic Development on beginning the activity of a consultant of the Savings Banks Foundation for International Cooperation (SBFIC) of Germany as a manager.
Andreas Franke, technical manager of the German-Azerbaijan Fund (GAF), said earlier that the guarantee can be given to a partner bank of the German-Azerbaijan Fund (GAF) for Small and Medium Business, such as the Bank of Baku, Bank Respublika, UniBank, Para Bank, Demirbank and AGbank. The GAF's main condition is that the attracted funds be directed to the development of small- and medium-sized enterprises in the GAF business scheme, or banks will have to generate the same amount of portfolio allocated to this sector.
The Fund should cooperate as an accounting account in the KfW headquarters. The consultant will monitor Azerbaijani banks and act as a guarantee before the KfW.
Guarantee of the LGF can be given in amount of up to 90 percent of the amount of the loan, the remaining 10 percent, respectively, will be under the bank's own risk.
The KfW rendered Azerbaijan 4 million euro for the establishment of the fund, 3.75 million of which will be as guarantees and 0.25 million as payments to consultant.