KfW to sign agreement with Azerbaijan on third loan to support business in 2012
Azerbaijan, Baku, Oct. 4 /Trend, N.Ismayilova/
By the end of the year, German Development Bank KfW will submit to the Government of Azerbaijan the concept of project to support small and medium enterprises (SMEs) in the country, which will be financed through the third soft loan worth five million euros, the KfW Baku office told Trend.
According to information, an agreement was reached last week during the visit of the delegation headed by the financial projects manager at KfW Herald Hyugner.
"The financial agreement with the government is expected to be signed next year," the bank said.
"The Bank intends to provide the credit in national currency of Azerbaijan and assume the risk of exchange rate," Hyugner said earlier.
Like the previous two loans, KfW will provide the third loan also on preferential terms - 40 years with a 10-year grace period at an annual rate of 0.75 percent.
These funds as the first two loans are designed for funding SMEs through German-Azerbaijani Fund (GAF).
He said the current portfolio of the German-Azerbaijan Fund (GAF), through which the German bank's funds are spent on SME support, reaches 11.5 million euros.
Since the beginning of its activity, German-Azerbaijan Fund financed 30,000 loans worth more than 110 million euro in total at the expense of own funds. At present, the fund's activity covers 16 regions, where 36 service points operate.
GAF partners were the Bank of Baku and Unibank, Parabank and Bank Respublika, DemirBank and AGbank, Rabita Bank and Mugan Bank and Nikoil Bank. Today Bank of Baku, Parabank, Bank Respublika, DemirBank, AGbank and UniBank have left.
However, it is not excluded that the list can be expanded within the third loan.