Last week review (July 25-29)
Moody's expects slight growth in Azerbaijan’s GDP in 2017
Moody's rating agency expects slight growth in Azerbaijan’s real GDP in 2017. However, the agency didn’t provide exact forecasts for the country’s GDP growth.
Last week, Azerbaijan’s State Statistical Committee reported that year-over-year GDP contracted 3.2 percent in the second quarter of 2016 following a 3.6 percent decline in the first quarter and a 6.5 percent contraction in the fourth quarter of 2015, said Moody’s report. Year-over-year economic activity in non-oil sectors contracted 6.1 percent in the first six months of the year, while the oil sector grew by 2.1 percent, according to the report.
The main driver of the decline in economic activity in Azerbaijan in the first half was the 33.6 percent contraction in construction, said Moody’s.
Azerbaijan introducing online privatization
The Azerbaijani State Committee on Property Issues has presented a new privatization portal (privatization.az). “The portal will greatly facilitate the process of privatization and it will be possible to achieve more transparency in this area,” Rafig Jalilov, deputy chairman of the State Committee, said. All the information about the facilities to be privatized, their addresses, location and, finally, the initial cost, will be presented on the portal, he said. Also, it will be possible to participate in online auctions via the portal. The portal has been designed in two languages - Azerbaijani and English, allowing foreign investors to actively participate in the process of privatization, he said. Currently there is the information on the portal about the Dashkesan Mining and Processing Plant and Baku Electroavtomat OJSC, which are being privatized.
Azerbaijan, ADB ink loan deal
Azerbaijan’s Azerishig OJSC and the Asian Development Bank (ADB) have signed an agreement on the allocation of the loan’s first tranche to improve the power distribution system in Azerbaijan, ADB Baku office said. The agreement was signed by the head of Azerishig OJSC Baba Rzayev and ADB country director in Azerbaijan Nariman Mannapbekov.
The amount of the first tranche of the loan, which was allocated for 25 years with a five-year grace period, is $250 million.
Mannapbekov said earlier that the loan interest rate will be formed on the basis of the six-month LIBOR (London interbank offered rate) with a very low margin – nearly 0.4 percent.
The guarantor of the credit debt’s repayment is the state, in connection with which the ADB signed a guarantee agreement with Azerbaijan.
Azerbaijan, Iran mull financing Astara-Rasht railway’s construction
Head of Azerbaijan Railways CJSC Javid Gurbanov and Iran’s Deputy Minister of Roads and Urban Development Asghar Fakhrieh-Kashan have discussed Azerbaijan’s financing the construction of Astara-Rasht railway on Iran’s territory as part of the North-South project.
During the meeting, the parties also discussed the schedule of the railway’s construction.
Earlier, Azerbaijan and Iran created a joint working group for allocating $500 million worth loan for construction of the Astara-Rasht railway, the cost of which exceeds $1 billion.
Azerbaijan, India mull North-South project
The North-South transportation corridor project has been discussed during the meeting between the Secretary of India’s Ministry of External Affairs Sujata Mehta and Azerbaijan’s Deputy Foreign Minister Khalaf Khalafov in Baku. The cooperation in the IT sector, agriculture, cooperation within the UN and other issues were also discussed.
Number of Balakhani Industrial Park’s residents increases in Azerbaijan
The MET-AK company received the status of the fifth resident of the Balakhani Industrial Park in Azerbaijan. The corresponding certificate was presented to the representatives of the resident during the event organized by the Azerbaijani Ministry of Economy.
The company will be engaged in processing of plastic products in the territory of the park. MET-AK project plans to invest 16.5 million manat in the industrial park to implement the project, which will enable to create over 130 new jobs.
Lubricant manufacturing plant to be built in Azerbaijan
Alco Lubricant Company has received the status of the ninth resident of the Sumgait Chemical Industrial Park. The corresponding certificate was presented to the representatives of the resident during the event organized by the Azerbaijani Ministry of Economy.
The company will be engaged in the production of lubricants in the territory of the park. The investment cost of the project is $10 million. The plant with an annual industrial output of 30,000 tons will be built as part of the project and production is planned to be launched in the second half of 2017.
The residents of the park are exempt from income tax, land tax and property tax for seven years to increase the investment attractiveness of the park. Moreover, equipment and technologies used in the park are exempt from VAT.
12 projects receive investment promotion documents in Azerbaijan
Twelve more entrepreneurs have received an investment promotion documents worth a total of around 106 million manats in Azerbaijan for their projects.
In total, to date, 30 entrepreneurs have received an investment promotion document and the total volume of investments under those documents neared 300 million manats. It is planned to create around 2,700 jobs by using these investments. Investment projects cover seven economic regions of Azerbaijan.
The new mechanism exempts entrepreneurs from land taxes and provides them with 50 percent benefit when paying the income tax. The import of equipment and technologies by entrepreneurs for the implementation of these projects is fully exempt from the value-added tax and customs duties.