Azerbaijan tightens requirements for new projects with int’l financial institutions

Business Materials 30 October 2012 13:04 (UTC +04:00)

Azerbaijan, Baku, Oct. 30 / Trend A. Akhundov /

The Azerbaijani government's new policy on foreign borrowing is aimed at tightening the requirements for those parties preparing new projects, a source in the government told Trend on Tuesday.

"New projects must be carefully prepared," a source said. "The goals, objectives and operations must be clearly defined. This concerns not only the international financial institutions which give loans, but state agencies which want to attract these funds."

According to the source, there are cases of slow delivery of the funds within some projects with international financial institutions.

"The allocated funds are being developed slowly as further work and mechanisms for their implementation have not been precisely determined while preparing the project," a source said. "The funds are not mastered. The process of paying off the loans is underway. The requirements for new projects will be tightened to avoid these types of cases."

In his speech at the meeting of the Cabinet of Ministers dedicated to the socio-economic development in the first half of 2012 and the further challenges, President Aliyev said that Azerbaijan should be more cautious while attracting additional loans.

"The external debt is at a very low level," the president said. "It stands at seven per cent of the gross domestic product. This is one of the most positive indices in the world scale.

"Despite this, I have instructed that we must be more careful while attracting additional loans. Today, we give the loans and this is a positive phenomenon from a political and an economic points of view.

"We place our money through various instruments. Drawing the loans can only be exceptional as the main work is done through the state budget or previously obtained loans. I do not see a great need for new loans. That is, it can be done as an exception, but every credit must be justified. This must be justified by the company, or by the Ministry willing to take the credit for us not increasing the external debt."