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INTERNATIONAL BANK GETS A FRANCO-GERMAN LOAN

Business Materials 22 June 2005 18:49 (UTC +04:00)

Societe Generale (SocGen), France’s No. 3 bank, and the International Bank of Azerbaijan (IBA) have clinched a framework agreement on the opening of a EUR45-million credit line by the French bank to the biggest lending agency in the South Caucasus region.

The corresponding document, signed by IBA’s deputy chairman Asgar Mammadov, and the deputy to the SocGen’s regional representative, Teyba Guliyeva, makes relevant provisions for EUR45 million in loan to be secured by COFAZ of France and Hermes of Germany, in the amount of EUR 15 and EUR30 million, respectively.

Mammadov noted that the credit line has been allocated for acquisitions from France. “Imports from France will be secured by COFAZ, while the same operations from Germany will bear the corresponding insurance cover by Hermes. There is no restriction on financing issues,” he said.

According to Guliyeva, the framework agreement has been drawn up for two years, but the “term is not of principal importance.” “Societe Generale has been actively cooperating with the International Bank (of Azerbaijan) for more than two years, and is about to enhance this kind of cooperation without insurance covers by COFAZ and Hermes. The credit line is to be recoverable within three to 15 years. The minimum amount of a single credit has been set at EUR1.5 million, as smaller loan amounts, approved by Societe Generale, are not covered by export insurance agencies,” she said. The maximum budget of a project, to be funded through the credit line, is limited by the amount of the entire loan by SocGen.

The French bank expects that development of cooperation with the International Bank will lay down a proper foundation for the raise of the amount of the minimum loan stock to be approved without export insurance cover. “Before the signing of the agreement [today], we have started to cooperate [with IBA] in the framework of a credit line. We have already determined the first project, to be financed through the above credit provision, with the rate of lending to vary depending on the terms of financed projects,” Guliyeva noted. She stressed that besides the oil & gas sector, the SocGen is also interested in the fields of power engineering, as well as infrastructure building and banking. “In addition to IBA, we also intend to cooperate with other banks,” Guliyeva said.

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