Azerbaijani State Oil Fund’s assets forecasted to grow by over 5 times until 2025
Azerbaijan, Baku, May 7 / Trend E.Ismayilov /
According to forecasts, assets of the State Oil Fund of Azerbaijan (SOFAZ) until the end of 2024 will reach $176 billion, SOFAZ head Shahmar Movsumov said in an interview with Respublika newspaper, published earlier. To date, the amount of SOFAZ savings amounted to 32.4 million manat.
"These volumes are predicted in the case of preservation in the long run of oil price at $80 per barrel and yield of four percent," Movsumov said. "Increase in the State Oil Fund assets means the growth of strategic foreign exchange reserves and, ultimately, the financial capacity of the country".
In spite of the accumulation process, SOFAZ funds have been also directed since 2001 at stimulating economic development, the implementation of strategically important state programs and projects. In particular, since 2001 the State Oil Fund has allocated 906.5 million manat to improve the welfare of refugees and internally displaced persons. Due to SOFAZ funds as of March 31 this year, 58 settlements were built for refugees and internally displaced persons, 19,073 families were provided with new housing.
Also, SOFAZ allocated 298 million manat from 2002 to 2007 to implement the project of construction of the Baku-Tbilisi-Ceyhan oil pipeline. In 2006, for the formation of the authorized capital of Azerbaijan Investment Company 90 million manat were allocated from the State Oil Fund.
Currently, work is underway on a new railway Baku-Tbilisi-Kars project, designed to connect the trans-European and trans-Asian railway systems, and provide transportation of passengers and goods from Europe and Asia through Azerbaijan, Georgia and Turkey.
"Since 2007, the State Oil Fund has allocated 227.3 million manat to implement the new Baku-Tbilisi-Kars railway project," Movsumov said.
He said that since 2006 the State Oil Fund has allocated 716.3 million manat for reconstruction of the Samur-Absheron irrigation system.
State Oil Fund was established in 1999 and at that time its assets amounted to $271 million.
Based on SOFAZ's regulations, the funds may be used for the construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems. The main purpose of the fund is the accumulation of funds and placement of its assets abroad to minimise the negative impact on the economy, preventing a 'Dutch syndrome' to ensure savings for future generations and maintain the current socio-economic standard in the country.
The official exchange rate is 0.786 manat to $1 on May 7.