SOFAZ invests in EBRD debut fund
By Nigar Abbasova
The State Oil Fund of Azerbaijan (SOFAZ), which bears responsibility for accumulating and managing oil and gas revenues of the country, is planning to invest some €100 million in the Equity Participation Fund (EPF), a debut fund managed by the European Bank for Reconstruction and Development (EBRD).
The EPF will allow SOFAZ to participate in the EBRD’s direct equity investment portfolio in Central and Eastern Europe, Central Asia and the southern and eastern Mediterranean region, as well as in Turkey, with a view to achieve a long-term capital growth by making investments in financial, industrial, agricultural, infrastructure, and energy sectors.
CEO of the Fund Shahmar Movsumov said that the investment is a continuation of the strategy pursued by the company for the diversification of different financial instruments and geographic locations in the portfolio of SOFAZ. Moreover, the investment structure will allow to closely cooperate with the EBRD which has the extensive experience and strong local presence in the region.
Some 76.6 of SOFAZ’s investment portfolio fell to a share of bonds and money market instruments in the first half of 2016. Shares accounted for some 11.1 percent, while the share of gold and real estate amounted to 3.8 and 5.5 percent respectively. The volume of investment portfolio stood at $33.76 billion as for July 2016.
EPF will allow investors to automatically take 20-30 percent of the economic interest in all of the EBRD’s eligible direct equity investments worth above €10 million during a five-year investment period, building a large, diversified and well-balanced portfolio equity investments across the countries where the EBRD invests.
Earlier, Azerbaijani Economy Minister Shahin Mustafayev received a delegation of EBRD, headed by Bruno Balvanera, director for the South Caucasus, Moldova and Belarus. The minister informed the guests about the ongoing large-scale reforms in Azerbaijan with the aim of further improving the business and investment sphere, as well as the development of entrepreneurship in the country, emphasizing that the development of private sector remains one of the priorities for the government. Balvanera, in turn, expressed appreciation and support for the reforms which are being carried out in Azerbaijan in the economic sphere, as well as in the area of developing entrepreneurship, customs, and privatization.
EBRD has allocated some € 2.5 billion to Azerbaijan for implementation of approximately 159 projects since 1992. One of the main tasks of EBRD is to ensure a stable development of Azerbaijan's non-oil sector by investing in the small and medium-sized private enterprises.
Azerbaijan is the largest recipient of EBRD funds in the South Caucasus, as well as one of the largest recipients of this organization's funds in the CIS and Eastern Europe.
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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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