New fund to secure foreign investment in Azerbaijan's ICT sector
By Nigar Orujova
The State Fund for the Development of Information and Communication Technologies will provide absolute security for foreign investments in Azerbaijan's ICT sector, the Fund's Executive Director Elchin Zeynalov told Trend news agency on June 25.
2013 was declared the ICT Year in Azerbaijan. The action plan on the ICT Year includes the activity of the State Fund for ICT Development, the High Technologies Park, Information Security Center, Virtual Qarabag ICT center, and IT University.
The State Fund was established to implement the state policy on development and support of small enterprises in the scientific and technical fields and defines three ways of financing - investments, grants and credits.
Each Azerbaijani citizen may avail of the advantages of the ICT Fund's financing. Financial aid to enterprises will be arranged through contests. Businesses can borrow small, medium and large loans.
According to the ICT Ministry, the initial financing volume of the Fund for 2013 is 15 million manats (over $19 million).
According to Zeynalov, the main point is the projects of national importance, which will also receive financial support of the Fund.
The main purpose of the Fund in these projects is to encourage the world's major ICT industry vendors to participate in the projects, Zeynalov believes.
"If foreign countries wish to invest in the Azerbaijani ICT sector, the Fund will be ready to undertake some of the investments in these projects. The main criterion in this regard is that the share of the Fund in the projects would not exceed the share of the foreign investor. In other words, participation of the Fund can be evaluated as the demonstration of the public sector's interest in investments, as well as its role in ensuring security of the foreign investment," he said.
Currently, substantial efforts are being made to organize the work of the Fund, the logistics and staff are being formed. The Fund is expected to start operation in the next few months.
The Fund will organize contests for developers, which is an important component of the Fund, until the year-end. As a result of the tenders, distinguished projects will be selected with perspectives of their future funding. The funds will be spent purposefully, with further control over their utilization as intended.
According to Zeynalov, the Fund will also organize events with the participation of renowned industry professionals to promote the development of innovative and intelligent business.
"Recently the educated youth seeking to start their business have shown great interest in the ICT sector. Whereas a few years ago young professionals were trying to get jobs in big companies, now they want to create their own start-ups. Our main goal is to provide them with financial resources," he said.
But Zeynalov stressed that the startup movement in Azerbaijan is still unfolding and there is a lack of the necessary infrastructure for this purpose.
"It's no secret that the process of creating any infrastructure is complex. That is why we can say that the creation of the startups' infrastructure will cover the next few years. Participation of the venture funds," business angels", experienced startup developers, educational institutions and government agencies is important. The State Fund, in turn, within the framework of the organized tenders will provide expert advice and assistance, as well as coordinate startups with investors," Zeynalov said.
According to him, High-Tech Park was established in Azerbaijan to create laboratories for start-ups where developers will be allowed to implement the projects technically.
"High Tech Park is envisaged for the development of IT projects and operation of IT companies. A business incubator for the initial stage of the startups project will operate in the Park. A center of innovation and technology transfer will also operate in the Park to support commercialization of the projects and their integration into the real sector of the economy. All these structural units of High Tech Park will be handed over to developers, programmers, designers, and IT specialists in the coming years," Zeynalov said.
Organizational work on creating the 30 hectare area IT high technology park, located in Sumgayit, an industrial city some 30 km north of the capital Baku, is underway in the country. Participants of the high-tech parks will be tax and customs duty-exempt for seven years.