Azernews.Az

The Azerbaijani government and the World Bank signed a loan agreement for the Capital Market Modernization Project (CMMP) Thursday.

The WB has allocated a $12 million loan to Azerbaijan to implement the project.

"The project is designed to assist the realization of the securities market development strategy in Azerbaijan, as well as the technical organization of the information development of the stock market," State Securities Committee chairman Rufat Aslanly, who co-signed the loan agreement with WB Baku office head Joseph Owen, said at the signing ceremony.

The WB office head said the project aims to assist Azerbaijan’s private sector over the mid-term, which will give an incentive to the development of the non-oil sector. Over the long term, CMMP facilitates increased transparency in the public and corporate sectors of the economy, Owen said.

The project is a continuation of the WB’s support to boost and diversify Azerbaijan’s financial sector.

The project will be funded through the International Bank for Reconstruction and Development (IBRD), the WB’s lending arm. The loan is provided for 15 years, with a three-year grace period.

The Swiss State Secretariat for Economic Affairs (SECO) will finance two components of the CMMP - improving the legal framework and development of new financial incentive instruments on the market. SECO approved the allocation of technical assistance worth $1.6 million for this project.

The Azerbaijani government will allot $2.2 million under the project.

During the project implementation, a particular emphasis will be on improving legislation and market infrastructure. Measures will also be taken to stimulate demand and supply in the market.

The WB’s current portfolio in Azerbaijan covers 20 projects worth $2.3 billion. To date, the bank has allocated $2.9 billion to Azerbaijan under 43 projects, as a result of which the country is surpassed only by Turkey and Kazakhstan.