By Leman Mammadova
The Black Sea Trade and Development Bank (BSTDB) supports economic development and regional cooperation through participation in granting loans for projects in the public and private sectors of member countries, by opening credit lines, investing in and granting guarantees and trade financing.
BSTDB expands its portfolio of projects in various sectors in Azerbaijan, the Bank's President Dmitry Pankin told Trend.
He stressed that the BSTDB works on the Shah Deniz-2 project together with the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB). In his words, the BSTDB has allocated $60 million for this project.
In 2015, ADB and the EBRD, with the participation of the BSTDB, agreed to provide a financing package of almost $1 billion for the Shah Deniz-2 project. The EBRD and ADB agreed to provide a loan of $250 million, and the BSTDB - $60 million. The rest of the funding is planned to be provided by a group of commercial lenders.
As for cooperation with Azerbaijan’s state oil company, Pankin noted that the Bank implements a large ongoing project with SOCAR.
“We provided $50 million for the company’s trade financing. We find the cooperation with SOCAR very successful, and we would like to continue work in this direction,” he said.
He further added that the BSTDB directs funds in national currency, received as a result of placement of the first BSTDB loan in Azerbaijan, to support the development of small and medium-sized businesses.
The Black Sea Trade and Development Bank is the first international financial institution to issue bonds in Azerbaijani manats. Lending in national currencies appeared after the crisis of 2007-2008, when the monetary units of emerging markets fell sharply. Thus, it became too risky to take loans in dollars and to receive revenue in own currency.
BSTDB issued the first tranche of Azerbaijani manat bonds worth 10 million manats ($5.88 million) on August 1.The total amount of manat bonds, which the BSTDB plans to issue, equals 50 million manats ($29.42 million) and will be allocated in tranches during the year.
The Bank can further issue manat bonds. The ADB and the EBRD are also interested in issuing and placing bonds in Azerbaijani manats.
Currently, the Bank develops a number of projects in the field of electric power industry, production of equipment for the oil and gas industry, support for trade financing.
The Bank was founded by Azerbaijan, Albania, Bulgaria, Georgia, Greece, Moldova, Armenia, Romania, Turkey, Ukraine and Russia in 1999.
At present, the authorized capital of the Bank is 3.45 billion euros and the share capital is 2.3 billion euros. Azerbaijan has the 5 percent share capital and is the seventh largest shareholder of the 11 member countries.
So far, the total number of Bank's operations in Azerbaijan is 39 with the financing in the amount of about 366 million euros.
The current portfolio of the Bank on projects in Azerbaijan is estimated at 53.867 million euros as of the end of 2018.
Earlier, Pankin noted that BSTDB may allocate about 80 million euros for projects in Azerbaijan in 2019. This will mainly be the financing of small and medium-sized enterprises (SMEs).
BSTDB has prepared the first four-year draft strategy for cooperation with Azerbaijan. The negotiations will continue in August and September.
Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888
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