(MENAFN- Trend News Agency) BAKU, Azerbaijan, April 9. Green projects areone of the priority directions for the Entrepreneurship DevelopmentFund (SIF), Chairman of the Management Board at the Fund under theMinistry of Economy of Azerbaijan Osman Khaliyev told Trend in anexclusive interview.
"Green projects are a major priority this year. Entrepreneurscan use the Fund's preferential lending mechanism to finance greenenergy projects and receive loans at a five percent annual interestrate. Currently, three initiatives in this domain have beencompleted. One of them tries to meet a poultry farm's energyrequirements by utilizing solar panels. Another initiative focuseson developing electric charging stations and promoting electronicinfrastructure development. The third project is dedicated tocreating construction materials through recycling, promotingclosed-cycle economic advancement," he said.
Khaliyev emphasized that such projects can be successfullyimplemented in various spheres of the economy and expressed thereadiness of SIF to finance all initiatives of entrepreneurs,including green projects, on preferential terms.
In addition, he said SIF has developed its own ESG model.
"The fund has developed an ESG (Environmental, Social, andCorporate Governance) model that is consistent with internationalstandards, allowing it to identify the environmental, social, andcorporate governance aspects of backed firms, as well as potentialhazards. Using this strategy, the Fund proactively works tomitigate or prevent the identified risks in the future," Khaliyevstressed.
The chairman noted that the Fund is diligently addressingimportant issues such as creating new jobs and providingpreferential financial resources to women and youngentrepreneurs.
"The fund-financed projects are expected to produce 3,154 newjobs by 2023. Of them, 398 enterprises that have received softloans from our Fund belong to women entrepreneurs and youngentrepreneurs," the chairman added.
In general, the chairman stated that SIF issued soft loanstotaling 43.1 million manat (or $25.35 million) to fund 1,065investment projects in the first quarter of this year.
Khaliyev stated that the SIF's primary objective is to givefinancial assistance to commercial entities, promote cooperationbetween the state and entrepreneurs, and create a conducive climatefor interaction.
"Currently, the fund collaborates with 21 banks, 9 non-bankcredit organizations, and 10 credit unions within the country,enabling business entities to access favorable financialassistance. In the initial three months of the present year, softloans totaling 43.1 million manat, or $25.35 million, weredisbursed for 1,065 projects through authorized creditorganizations," he said.
The chairman emphasized the importance of cooperation with theprivate sector in the implementation of financial mechanisms tosupport entrepreneurship, such as soft loans, guarantees,subsidies, and equipment loans. These mechanisms are implementedthrough authorized credit organizations.
"Preferential loans are allocated for projects aligned with thepriority areas outlined for 2024. These projects undergo evaluationby both credit organizations and the fund, with funding decisionsbased on their potential economic contribution and impact ongrowth. Alongside collaboration with credit organizations, the fundactively engages with various entrepreneur associations and clubs,conducting regular meetings with their members," Khaliyevadded.
Speaking about activities in the liberated territories, thechairman noted that a special approach has been developed for theterritories of Azerbaijan liberated from occupation to identifypriority areas for preferential lending.
"Commencing in 2022, the Fund initiated offering preferentialloans to businesses operating in the liberated territories. Thusfar, over 14 million manat ($8.2 million) have been allocated toseven projects in industries and agriculture within these regions.A tailored approach has been devised for these territories toascertain priority sectors for preferential lending. The supportedprojects encompass not only industry and agriculture but also theservice sector," he said.
According to the chairman, the fund has started implementing amechanism of guarantees and subsidies for entrepreneurs, aimed atstimulating economic activity and investment, since the beginningof February this year.
"We offer a guarantee of up to 90 percent for business loans,ranging up to 5 million manats, with an annual interest rate cappedat 15 percent," Khaliyev explained, emphasizing that projects inexempted territories are provided with state guarantees.
He pointed out that entrepreneurs are also eligible forsubsidies on these loans, with the government subsidizing 10% ofthe annual interest rate for a period of up to 36 months.
"We've established an information system called 'Electronic Loanand Guarantee' to enable entrepreneurs to apply electronically,streamlining the process and expediting access to financing. Theseinitiatives unlock fresh opportunities for entrepreneurs acrossdiverse sectors of the economy and aid in revitalizing economicactivity in the liberated territories," he added.
Khaliyev emphasized that one of the strategic goals of SIF is tomake financial mechanisms more accessible to entrepreneurs. Henoted that one of the key benefits of electronization forentrepreneurs is increased access to financial resources.
"One of the fund's primary objectives is to improveentrepreneurs' access to financing instruments. To do this, thefund is creating the capacity for entrepreneurs to submitapplications via the 'Electronic Loan and Surety' informationsystem, allowing them to apply for soft loans remotely. Thesystem's capacity to continuously monitor application statusdistinguishes it. Furthermore, by integrating the informationsystem with the 'Electronic Government' portal, entrepreneurs canget relevant papers from a centralized database of other governmentdepartments," he said.
Khaliyev believes that the advantages of the electronicinformation system contribute to the development of trust betweenthe public and private sectors by ensuring transparency andexpanding access to preferential financial resources forentrepreneurs.
In 2023, the Entrepreneurship Development Fund of Azerbaijanprovided concessional loans worth 193.8 million manat, or $114million, to finance 3,276 investment projects.
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