BAKU, Azerbaijan, July 5
By Eldar Janashvili - Trend:
The European Investment Bank’s (EIB) involvement in Azerbaijan is focused on social and economic infrastructure, local private sector development and climate action, the bank told Trend.
The EIB finances projects in Azerbaijan as well as in other Eastern Partnership countries in close cooperation with EU Member States and EU partners on the basis of EU budget guarantees for projects of significant interest to the EU and the countries concerned.
"We support projects that contribute to the stabilization and modernization of Eastern Partnership countries and are beneficial for both the target countries and their relationship and connection with the European Union," the bank said. "Through improving access to long term finance for small and medium sized business we strengthen the private sector and support job generation and growth."
"Smaller projects, particularly supporting SMEs and MidCap companies are financed through intermediated loans through EIB partner financing institutions that are involving all major banks operating in Azerbaijan," the bank added.
"Every project financed by the EIB must be in line with at least one of the EIB priorities: climate and environment, development, innovation and skills, support to SMEs and infrastructure development," Spokesman for EIB Dusan Ondrejicka said. "An intermediary financial institution is obliged to share the financial value added represented through being provided by the EIB with funds under favourable terms with the final beneficiary. However, partner financial institution provides loans to SMEs in its responsibility and risk. Therefore, it sets the condition of the individual loans."
"So far in Azerbaijan, EIB lending commitment represents 96 million euros," the spokesman said. "For the time being EIB financing in Azerbaijan is related to the support to projects by small and medium-sized enterprises. EIB funds are being intermediated through AccessBank, Azerbaijan’s leading provider of finance to SMEs to foster the development of the private sector, with the goal of contributing to job creation and an increase in the living standards of Azerbaijan’s citizens."
"In addition, the European Investment Bank Group, the bank of the European Union, has prepared a comprehensive response to the coronavirus pandemic outside the EU that will provide up to €5.2 billion in the coming months," Ondrejicka said. "This financing is part of the Team Europe response and supported by guarantees from the EU budget. It will both strengthen urgent health investment and accelerate long-standing support for private sector investment that reflects financing needs in more than 100 countries around the world, including the Central Asian and South Caucasus countries, including Azerbaijan."
"The immediate fast-tracked support targets sustaining of jobs and livelihoods in sectors most threatened by the economic and social impact of the coronavirus, and will be followed by additional long-term health and business financing as needed," the spokesman said.
"This rapid response is being adapted to reflect the specific sector needs and new local challenges as the impact of the coronavirus continues to develop," Ondrejicka said. "The EIB will also provide technical assistance and share sector expertise to strengthen and enhance the impact of new investment."
"The EIB stands ready to accelerate about €1 billion disbursements on existing approved loans to help the health sector in countries outside of the EU face the coronavirus pandemic, as well as to ensure that business activity can access immediate financing to counter cash flow and liquidity challenges," the spokesman said.
"In addition, reinforced support for the health sector will benefit from the EIB’s unique technical experience and financial expertise gained from more than 30 billion-euro-hospital, healthcare and health innovation investment across Europe and around the world in recent years," Ondrejicka said.
The EIB works with public sector partners to increase concessional financing available for both health and business investment. This includes support for public services including health, regional trade and highly vulnerable sectors such as tourism and hospitality.
Follow the author on Twitter: @eldarjanashvili