Azmeco and Sberbank sign Memorandum of Cooperation (PHOTO)
Azmeco's expansion plans secured with additional $1.5bn facility
AzMeCo and Sberbank have signed a Memorandum of Cooperation at the XVIII St Petersburg International Economic Forum, which sets out the priorities and cooperation framework between the two companies.
According to the agreement, Sberbank will finance Azmeco's projects to the value of $1.5bn. This includes the refinancing of the Karadagh methanol plant near Baku at a value of $450m, long term project financing of commercial retail space in Moscow, long term project financing of methanol plant construction in Russia.
The Memorandum of Cooperation has a five year term, with the possibility to extend. Specific projects will be subject to separate agreements. This memorandum does not limit Azmeco in its cooperation with other banks.
Nizami Piriev, the Chairman of the Board of Directors of AzMeCo, signed the document on behalf of the company. Sberbank's signatory was Sergey Gorkov, Deputy Chairman of the Board.
Nasib Piriev, the Azmeco Group CEO said: "This deal is the first of its kind: a large project finance transaction of a private company from Azerbaijan with Sberbank, and I am very proud of this great achievement. We have been working on the preparation of this deal for the last 6 months and I am happy that it is now concluded. I want to thank both the Sberbank and AzMeCo teams for their efficient and hard work to make this deal a reality. We also hope that this precedent will open up new ways of cooperation for other private companies from Azerbaijan and large international banks."
Deputy Chairman of the Board of Sberbank, Sergey Gorkov, commented: "Azerbaijan is the biggest foreign investor in the Turkish economy, which is why the Azerbaijani market is so relevant to Sberbank Group. For us, partnership with AzMeCo is the first example of cooperation with a private company from Azerbaijan and marks the possibility of significantly expanding our client base in the region."
AzMeCo is part of the PNN Group of companies, which consists of oil, gas and petrochemical assets, as well as retail businesses in Azerbaijan, Russia, Ukraine, the Netherlands, Uzbekistan, Afghanistan and Turkey. AzMeCo owns the only methanol plant in Azerbaijan which meets all existing international standards; the company has invested around $500 m in the construction of the plant. Gas is provided to AzMeCo by the State Oil Company of Azerbaijan Republic.