German KfW to allocate new loan for entrepreneurship development in Azerbaijani regions
Azerbaijan, Baku, Aug. 17 / Trend I.Khalilova /
German development bank KfW is preparing to submit a document to the Government of Azerbaijan for signing which is an agreement on the third preferential loan of five million euros for the development of small and medium-sized enterprises (SMEs), KfW Baku Office told Trend on Friday.
'All permits from the German government are obtained and in particular, from the Ministry of Economic Development, for the signing of the contract' the KfW office said.
Along with the loan, the German bank is also preparing to provide technical assistance to the sum of 250,000 euros for supporting events.
Like the previous two loans, KfW will provide the third loan on favourable terms for 40 years with a 10 year grace period at an annual rate of 0.75 per cent. The loan is intended to finance SMEs through the German-Azerbaijan Fund (GAF). The differences lie in the fact that the funds of the third loan are intended to finance projects of SMEs in the regions of Azerbaijan, including agriculture.
The Bank also intends to provide a third loan in the national currency of Azerbaijan and take the risk of changes in foreign exchange.
Since 1999, the German bank has provided GAF with two tranches of 8.7 million euros. Mastering of these funds is completed and currently funding is provided by the bank from the revolving fund account and the profit earned by from the commencement of operations.
GAF partners are Bank of Baku and UniBank (from March 2001), from January 2003 - Parabank and Bank Respublika, from September 2004 - DemirBank (formerly Azerdemiryolbank) and AGbank, from December 2006 - Rabitabank and Mugan Bank and February 2007 - Bank Nikoil.