Islamic Bank to offer Azerbaijan a number of financing projects for 2006-2007
Preliminary version of the cooperation project was offered by the Islamic Bank for Development (IBD) for 2005-2007, a government told Trend. Energy projects, water industry and financial sectors are included in the project.
According to the IBD, the country may receive one beneficial, two commercial credits and 1-2 grants annually. Beneficial financing for the country is not so much on the agenda, which can be explained by the intensive economic development of the country.
As this question has been under discussion for about 3 years, this doesnt exclude a possibility of offering the beneficial credits to the country, as according to the bank policies -education, healthcare and water resources projects are anyway financed via beneficial credits. Country will receive at least one beneficial credit per year.
Out of 12 Azerbaijani projects with the total cost of $150m, only 4 projects with the cost of $61m were commercial ones. Alyat-Kazimagomed highway, Mingechavir electric station, Khachmaz electro station and Udjar- Evlakh road construction were realized in the course of these projects.
IBD maximum credit amount is 7m of Islamic dinars ($10,5m), whereas one commercial credit previously consisted of $20m. However, bank has decided to raise this limit to $100m last year, with the hope to include module stations building project. Admittedly, Azerbaijan was one of the first countries to receive such amount of credit in the first time. Regarding this credit, portfolio of IBD credits for Azerbaijan consists of $250m. However, considering the fact that the credit agreement was not signed it is under the threat of being suspended.
Technical aid amount of IBD to Azerbaijan now makes up $4m.
A three year agreement between IBD and Azerbaijan is always in the state of revisal, as country is always allowed to bring changes into program and define its own priorities. Cooperation between the two sides is now based upon the agreement for 2005-06 and in 2006, which will be later extended for 2007-2009 as well. The banks mission is soon to arrive in Baku.