EBRD ready to issue $50M for Azerbaijan's agriculture sector
By Aynur Karimova
The European Bank for Reconstruction and Development (EBRD) has expressed readiness to allocate funds for the development of Azerbaijan’s agrarian sector.
Head of the EBRD’s Baku office Neal McCain announced that currently, the Bank is holding trainings for bankers in agricultural lending.
“But this year, we have not financed agriculture [within the framework of the Azerbaijan Agricultural Finance Facility – AZAFF] due to the situation in the banking sector [of the country],” he told Trend. "Our partners are waiting for the situation in the sector to stabilize."
Most likely, less than $50 million will be allocated to Azerbaijan’s agricultural sector in 2016, McCain added.
Nevertheless, he considers that the improvement of the situation has to be expected for the second half of 2016.
“Currently, we are also discussing financing of projects in other spheres in Azerbaijan,” McCain said adding that “of course, this year the volume of financing will be less than the year before last, but we are waiting for good progress due to the large infrastructure and gas projects.”
Azerbaijan works for the development of agricultural sector, and aims to increase volume of domestic production and expanding range of the export goods. In this regard, the government keeps cooperating with international financial institutions and attracting investment in this sector.
Over the past few years, the EU and the EBRD have been involved in several initiatives aimed at supporting development in Azerbaijan's agricultural sector.
The EBRD, with the support of the EU, has been implementing the AZAFF, a financing facility to encourage local financial institutions to increase lending to farmers and other entities in the agricultural sector, since September 2015.
AZAFF combines the EBRD's traditional approach to channel financing to ultimate beneficiaries through banks with the provision of non-financial assistance in order to increase the direct impact of financing and foster the overall economic development of the agriculture sector in Azerbaijan.
The project’s overall objective is to support the development of the agricultural sector in Azerbaijan by facilitating access to finance and business development services for agricultural enterprises and to help local banks diversify loan portfolios and increase their regional presence.
The EBRD has been active in Azerbaijan since the country's independence. To date, the Bank has invested in 146 projects with over $2.5 billion across various sectors of the Azerbaijani economy.
One of the EBRD's priorities in Azerbaijan is to contribute to the growth of the non-oil private sector by investing in dynamic small and medium-sized enterprises.
Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova
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