KfW to monitor the financial projects in Azerbaijan
Azerbaijan, Baku, April 5 /Trend A.Hasanov/
The mission of the German development bank KfW will arrive in Baku in late April for the monitoring of projects in the financial sector of Azerbaijan, Baku office of KfW told Trend on Thursday. New manager of financial projects of KfW in Azerbaijan will lead the mission.
"The visit will focus on concluding agreements on the allocation of third tranche for lending to small and medium enterprises, the second phase of agricultural financing of rural areas in Azerbaijan and the other," the office of KfW said.
The bank plans to allocate 3 million euros to finance the second phase of the project on agricultural financing of rural areas in Azerbaijan. The cost of the first phase of the project was five million euros. About 3.5 million euros were distributed. The remaining funds were intended for another bank. In particular, the negotiations were conducted with Demirbank, but they were stopped. ParaBank was also considered. But Turanbank was chosen. It will get the loan within the second phase of the project.
The bank intends to give a loan to implement the project to support small and medium enterprises in the country in national currency and to take the risk of exchange rate changes. Like the previous two loans, KfW will give the third loan on preferential terms - 40 years with a grace period of ten years at an annual rate of 0.75 percent. These funds, like the first two loans are designed to finance small and middle entrepreneurship in the German-Azerbaijan Fund.
The current portfolio of GAF, through which development of the German bank's fund to support small and medium-sized businesses is carried out, reaches 16.7 million euros.
Since 1999 the German bank has provided 8,7 million euros to GAF through two tranches. Their development ended, and currently financing banks is carried out from the revolving account and the fund's profit earned by it from the beginning of operations.
GAF partners are Bank of Baku and UniBank (since March, 2001), from January, 2003 - Parabank and Bank Respublika, September, 2004 - DemirBank [formerly Azerdemiryolbank] and AGbank, from December, 2006 - Rabitabank and Mugan Bank, from February, 2007 - bank Nikoil.
Azerbaijan has been cooperating with KfW since 1994. The strategic areas of the activity are to restore energy, water and other infrastructure, to support the development of financial and banking sectors, the private sector, health, etc.