BAKU, Azerbaijan, June 3
By Leman Zeynalova – Trend:
The Black Sea Trade and Development Bank (BSTDB) sees a growing demand for “direct to clients” credits, the Bank told Trend.
“A promising trade finance activity is the provision of larger “direct to clients” medium-term export/import credits of 12-36 months. This activity bridges financing trade and direct corporate lending, and we see a growing demand for such products as firms find value in the Bank’s ability to provide larger amounts and longer terms at attractive rates,” said the BSTDB.
Trade comprises part of the BSTDB’s name and since the time of its establishment there was a great need to formalize cross-border trade and to support the competitiveness of regional firms. BSTDB has a dual mandate, contributing to (i) economic development and (ii) regional cooperation among member countries.
“So, many of the Banks’ operations are regional or have at least two member countries involved. Our support for regional trade is provided in several ways, but mainly through direct financing of exporting and importing companies, if the amounts are significant, or indirect support through special trade finance credit lines we extend to selected local banks to on-lend smaller amounts to companies. BSTDB has been providing such trade finance credit lines to many Azerbaijani banks.
Regional trade is also benefiting from our loans to regional projects, such as the Shah Deniz II project, which is generating multi-billion gas exports from Azerbaijan, apart from purchasing drilling and other production equipment and other downstream benefits. The Shah Deniz gas field produced 18.1bn cubic meters of gas and 29mn barrels of condensate in 2020, and began pumping gas to South Europe in January 2021, following the completion of the Trans-Adriatic Pipeline (TAP), the final section of the Southern Gas Corridor. This international project includes BP, SOCAR, Turkish Petroleum, Malaysia’s Petronas, Russia’s Lukoil and the National Iranian Oil Co. The Shah Deniz partners spent more than USD 1 billion in operational and USD 942mn in capital expenditures in 2020. The same kind of benefits are generated by our investments the TANAP pipeline development in Turkey and SOCAR Turkey Enerji AS (STEAS), the TAP Pipeline in Greece and Albania, along with the various investments required for the Interconnector pipelines, which all are integrated in the Southern Gas Corridor,” said the Bank.
Looking forward, the Bank would also be well placed to support trade in the event of a surge in demand by increasing the amounts it provides through the network of eligible financial institutions in member countries.
“In addition to lending through intermediaries, the Bank may support trade facilitation, providing products that reduce transaction costs for firms and otherwise reduce risks or improve liquidity. BSTDB also provides guarantees to support importers, as we did in the case of Greek company Prometheus Gas S.A. as payment security to the Russian Gazprom Export for the supply of natural gas to Greece.”
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