USTDA Refuses to Fully Finance Capacity Building Project of State Oil Fund of Azerbaijan

Oil&Gas Materials 4 June 2008 20:15 (UTC +04:00)

Azerbaijan, Baku, 4 June /corr. Trend I.Khalilova / The US Trade and Development Agency (USTDA) has refused to fully finance the third phase of Capacity Building Project of the State Oil Fund of Azerbaijan Republic (SOFAR), SOFAR Executive Director said on 4 June.

"One of USTDA conditions is that it is prepared to grant only 50% of the project cost," Movsumov said, adding that it is explained through economic situation of Azerbaijan and growing assets of SOFAR.

Due to it, the U.S. Agency suggests co-financing, but the full expenses will be covered at an expense of the funds from the Azerbaijan Government and Oil Fund. According to the Head of the Fund, talks are ongoing with USTDA in this regard. According to initial estimates, nearly $700-800,000 is required to realize the third phase of the project.     

The scope of phase III, which has already been presented for consideration by the Agency, includes the assistance in selection of managers, as well as establishment of internal training system of the employees of the Fund (like internal school which will train Fund's employees on a permanent base).

The necessity for capacity building project of the Fund is linked with flow of huge oil revenues. 

"Due to it, we still continue the preparation works, which commenced two years ago, to receive huge oil revenues. The works are being carried out to introduce advanced technologies, software, as well as to improve professional level of the staff potential of the Fund," Movsumov said.

Within phase II of the technical assistance, which is still to complete, since last year American Overture Financial Services Company has been helping to improve accounting system, provides consultations in selection of the system to assess risks and profitability, as well as manage the investment portfolio. The USTDA grant for these works made up $855,075.   

Within phase I, the consultant of the SOFAR was Overture Managed Solutions. USTDA technical assistance within the phase I totaled $1.091mln.  

The official exchange rate on 4 June is 0.8204 AZN/USD

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