ICD ready to increase direct financing of projects in Azerbaijan
Azerbaijan, Baku, Jan.13 / Trend I.Khalilova /
The Islamic Corporation for Private Sector Development (ICD, is a member of the Islamic Development Bank) is interested in directly financing local companies in Azerbaijan, an IDB representative in Baku Tamerlan Taghiyev told Trend on Friday.
"Currently the ICD is considering a number of production projects, Mr Taghiyev said. "The matter is not only expansion of lending by means of Azerbaijani commercial banks, but that the ICS is ready to support local companies directly."
At the same time the Caspian international investment company may be an agent together with an Azerbaijani investment company.
The ICD already has similar direct financing projects in the country. The Islamic Corporation allocated funds to the Baku Plaza Tourism Enterprises JSC to construct a new Park Bulvar Shopping Mall in Baku. Funds worth $20 million were allocated under the Musharaka and Murabaha programmes and will run for five years with a one-year grace period. The area of Park Bulvar Shopping Mall is 15,371 square metres.
Mr Taghiyev said when selecting projects preference is given to companies which are ready to finance half of the project and it shouldn't be less than $5 million. The main condition for the ICD is a company audit to see it the financial state.
The ICD also plans to allocate funds to Azerbaijani banks of $40 million to develop small and medium enterprises (SME). In regard to this increased financing, the SME market is expected to have an enlarged list of bank partners.
In this regard the ICD has been holding talks with the country's five or six banks since last year. Information on terms of cooperation with the corporation which received their audit finance accounts was sent to these banks.
The ICD also plans to continue lending to operating bank partners in Azerbaijan. The corporation has already invested around $60 million in Azerbaijan's economy and established cooperation with eight banks and gave loans to the International bank of Azerbaijan (IBA), Rabita Bank, UniBank, Standard Bank and Turan Bank.
The corporation invested funds through its subsidiary companies - Caspian International Investment Company (CIIC), the Ansar Leasing Company (5 million manat). Ansar Leasing expects to receive around $6-7 million as a loan.
Islamic Corporation for Private Sector Development was established by the Board of Directors of the IDB at the 24th annual meeting of the Bank, held in Jeddah in 1999.
The ICD mandate is to support economic development in member countries through private sector development by providing finance for private sector projects in accordance with the principles of Shariah.
The Islamic Corporation for Development of the private sector is advising governments and private organisations how to facilitate the creation, expansion and modernisation of private enterprises.
Projects financed by the ICS are selected on the basis of their contribution to the economic development taking into consideration such factors as creating jobs and contribution to export development. The ICD also invited its projects' co-financiers and consults with governments and private sector groups. It assists with creating expansion and modernisation of private enterprises, to develop capital markets, improve management and strengthen market's economy role. The ICD also supplements the IDB activities in member countries and national financial institutions.