(MENAFN- Trend News Agency) BAKU, Azerbaijan, Dec.30. The European bank for
Reconstruction and Development (EBRD) is set to maintain its key
strategic priorities for Azerbaijan in 2023, Kamola Makhmudova,
head of EBRD in Azerbaijan, said in an exclusive interview with
trend .
“This means continued focus on developing the country's non-oil
sector, strengthening of local lenders, as well as boosting
investment in green Economy and regional connectivity,” she
explained.
Makhmudova pointed out that the Bank will be even more active in
2023, financing both, private and public sectors.
“Projects currently in the pipeline include sustainable
infrastructure, agribusiness, financial institutions, and green
energy, among others. At this stage, however, we cannot comment on
precise figures, as some of these projects are still a work in
progress,” she added.
Investments as of 2022
With one more deal to be signed by year end, the investment of
the European Bank for Reconstruction and Development (EBRD) in
Azerbaijan this year will exceed 90 million euros, said Kamola
Makhmudova.
She noted that approximately half of this investment went to
private sector.
“The breakdown is as follows: 25 percent each for sustainable
infrastructure sector, and technology media and telecommunications
(TMT sector), the remaining for agribusiness, manufacturing &
services and financial institutions,” Makhmudova explained.
Cooperation in green energy
Makhmudova noted that The European Bank for Reconstruction and
Development Bank eyes expanding green investments into new cities
in Azerbaijan.
“EBRD Green Cities is a flagship programme that has gained
tremendous popularity in recent years. At present, more than 50
cities have joined this unique programme to address their
infrastructure and environmental challenges in a sustainable and
resilient manner. As you know, Ganja is the first and, so far, the
only city in Azerbaijan to join EBRD Green Cities, and this year we
signed two projects there.
These projects will help the city address shortcomings in solid
waste collection and street lighting infrastructure,” she
added.
Makhmudova noted that EBRD launched the preparation of the Green
City Action Plan for Ganja city, which is expected to be ready next
year.
“The action plan will contain a comprehensive list of
infrastructure investments and policy measures to address the most
acute problems that Ganja residents are facing. In parallel, we are
in touch with the Ministry of Economy of Azerbaijan to expand the
Bank's green and low-carbon investments into new cities and
infrastructure sectors. Together with the Ministry, we are
reviewing a couple of new projects in Ganja city and in other parts
of Azerbaijan. We will publish more information about these
projects once preparation progresses,” she explained.
Hydrogen potential
Makhmudova pointed out that EBRD is preparing a market study
report on Low Carbon Hydrogen Economy in Azerbaijan.
“The market study report on Low Carbon Hydrogen Economy in
Azerbaijan is currently being prepared and we are expecting that
this report will be finalised in the upcoming months,” she
said.
Makhmudova noted that as part of the cooperation between EBRD
and Azerbaijani authorities on hydrogen, EBRD is supporting the
Azerbaijani authorities with the review and the assessment of the
potential of hydrogen production in Azerbaijan.
Prospects for EBRD's participation in projects in
Karabakh
Makhmudova noted that EBRD is keen to explore new infrastructure
projects that meet eligibility criteria in terms of Bank's policies
and standards.
'These criteria encompass a large spectrum of questions,
starting from environmental, sustainability aspects to procurement
and financial considerations. The list is extensive and each
project requires extensive assessment. Therefore, upon receipt of
such request by the government, we will evaluate such opportunities
on a project-by-project basis, in coordination with other IFIs
(international financial institutions) and subject to safe access
to project sites (as we understand that de-mining of the
territories is still ongoing),' Makhmudova explained.
Partnership with more banks
She noted that There are number of banks in Azerbaijan that the
European Bank for Reconstruction and Development currently
considers for cooperation in 2023, and subject to the positive
developments in the financial metrics of these local banks, EBRD
will be able to offer new loans to Azerbaijani banks in the near
future.
“We are currently looking at expanding our partner banks on
Trade Finance and MSME lending (SME Competitiveness / Green and
Women in Business – subject to the appetite from the local banks),”
she noted.
Makhmudova pointed out that EBRD, in line with the Azerbaijan
Country Strategy for 2019-2024, aims to strengthen the resilience
of the local Financial Institutions by Developing Financial
Markets.
“This stipulates sustainable funding structure and sound risk
management practices of banking sector. In order to meet these
objectives, EBRD is actively engaged in discussions with the
Central Bank of Azerbaijan to improve the conditions in Financial
Markets for IFI Bond issuance, Green bonds and derivatives /
securitization.
Besides these, EBRD has implemented two Technical Assistance
programs in Azerbaijan, namely Azerbaijan Agriculture Financing
Facility and PFI (Participating Financial Institutions) Capacity
Building Program in 2018-2022. One of the programs – PFI Capacity
Building Program – run over the course of 2019-2022 and assisted
local banks in identifying the gaps in their internal practices,
while developed respective action plans to allow local banks in
closing these gaps,” she said.
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