KfW Offers to Extend Office Term of German-Azerbaijan Fund Manager

Business Materials 19 December 2006 12:29 (UTC +04:00)

German Bank for Development KfW adopted a resolution on extension of the office term of a manager of the German-Azerbaijani Fund (GAF) SBFIC (Savings Banks Fund for International Cooperation, for an additional month. Natik Abdulaev, the Head of KfW Baku Office, informed Trend that the office expires in the end of 2006, while payment for services over January 2007 will be carried out at the expense of GAF profits.

The necessity for extension of the office term is related to unsettlement of the further fate of the third installment by the German Bank for GAF. KfW offered a consolidated credit, while the Azerbaijani government refused from the commercial part of the loan. At the same time there still exists indefiniteness with privileged part of the credit (в'¬5mln).

The total amount of the consolidated credit allocated for GAF was в'¬20mln, which was calculated for 10 years with the grace period of 5 years and fixed rate of eurolibor+2%.

However, the credit should be reprogrammed because only privileged part of the credit was issued and the agreement was developed on the base of the consolidated credit. The updated agreement will be presented no earlier than January 2007.

At present KfW and the Azerbaijani Finance Ministry are in talks on GAF further activities.

An agreement on the establishment of GAF was signed in 1999, whereas issue of credits was set up in March 2001. KfW allocated or GAF two credits totaling в'¬8.7mln at an annual rate of 0.75% with the term of 35 years including 10-year grace period.