Azernews.Az

Islamic Corporation for the Development of the Private Sector (ICD), a member of the Islamic Development Bank, is interested in directly financing local companies in Azerbaijan, an IDB representative in Baku, Tamerlan Taghiyev, told Trend news agency.

"Currently the ICD is considering a number of production projects," Taghiyev said. "The issue is not only about the increase in lending by means of Azerbaijani commercial banks, but also that the ICD is ready to support local companies directly."

The ICD already has such direct financing projects in the country. The corporation has allocated funds to the Baku Plaza Tourism Enterprises JSC to construct a new Park Bulvar Shopping Mall in Baku. $20 million was allocated for five years with a one-year grace period. The area of Park Bulvar covers 15,371 square meters.

Taghiyev said that when selecting projects preference is given to companies which are ready to finance half of the project and the funding should be no less than $5 million. The main condition for the ICD is a company audit to examine its financial standing.

The ICD also plans to disburse $40 million to Azerbaijani banks to develop small and medium enterprises (SME). The ICD has been holding talks in this regard with five or six banks of the country since last year.

The ICD has already invested around $60 million in Azerbaijan's economy, established cooperation with eight banks and issued loans to the International Bank of Azerbaijan (IBA), Rabita Bank, UniBank, Standard Bank and Turan Bank.

The corporation invested funds through its subsidiary companies - Caspian International Investment Company (CIIC) and Ansar Leasing Company. Ansar Leasing expects to receive around $6-7 million as a loan.

The ICD was established by the IDB board of directors at an annual meeting of the bank held in Jeddah in 1999.

The ICD mandate is to support economic development in member countries through private sector development by providing finance for private sector projects in accordance with the principles of Shariah.

The corporation is advising governments and private organizations on how to facilitate the establishment, expansion and modernization of private enterprises.

Projects financed by the ICD are selected on the basis of their contribution to economic development, taking into consideration such factors as creating jobs and contribution to export development. The ICD also consults with governments and private sector groups. It assists with expansion and modernization of private enterprises, to develop capital markets, improve management, etc. The ICD also supplements the IDB activities in member countries and national financial institutions.