IFC signs loan agree­ment un­der its first en­ergy ef­fi­ciency pro­ject in Azer­bai­jan

Azer News - - BUSINESS - By Aynur Ja­farova

The In­ter­na­tional Fi­nance Cor­po­ra­tion (IFC), a mem­ber of the World Bank Group, has signed an agree­ment with Azer­bai­jan's Bank Re­spub­lika on a $15 mil­lion loan to fi­nance en­ergy ef­fi­ciency projects, a re­port of the Baku of­fice of the cor­po­ra­tion said on July 29.

IFC will help the bank to cre­ate new projects in the area of fi­nanc­ing en­ergy ef­fi­ciency. Train­ings on rais­ing the aware­ness of the bank's em­ploy­ees on new pos­si­bil­i­ties in the mar­ket and eval­u­at­ing the projects on en­ergy ef­fi­ciency will be con­ducted as well.

This loan is the first IFC pro­ject in this field in Azer­bai­jan. The pro­ject is a part of IFC's fi­nanc­ing sus­tain­able en­ergy in Europe and Cen­tral Asia, sup­ported by the Aus­trian Fi­nance Min­istry.

With a to­tal pro­ject cost of $15 mil­lion, IFC will pro­vide $14 mil­lion of its own money, and $1 mil­lion from Canada Cli­mate Change Pro­gram.

IFC ap­proved the first loan to Azer­bai­jan to fi­nance re­new­able en­ergy and en­ergy ef­fi­ciency (RE/EE-credit) projects in May 2013.

Chair­per­son of Bank Re­spub­lika ex­ec­u­tive board Khadija Hasanova said at the sign­ing of the agree­ment that Bank Re­spub­lika has pos­i­tive ex­pe­ri­ence of work­ing with IFC since 2007.

"We are par­tic­u­larly in­ter­ested in co­op­er­a­tion with the cor­po­ra­tion in this new sphere, as this will pro­vide the pos­si­bil­ity to present new bank prod­ucts to the mar­ket, which in its turn will al­low in­creas­ing clients' aware­ness about en­ergy ef­fi­ciency," she said.

Per­ma­nent rep­re­sen­ta­tive of IFC in Azer­bai­jan Aliya Az­i­mova said in turn that pro­mot­ing en­ergy ef­fi­ciency is a part of IFC's strat­egy for im­pact on cli­mate change.

"Co­op­er­at­ing with Bank Re­spub­lika in this sphere, we want to demon­strate that the fi­nanc­ing of sus­tain­able en­ergy is a prof­itable busi­ness for both fi­nan­cial in­sti­tu­tions and for bor­row­ers. This cre­ates op­por­tu­ni­ties for the in­tro­duc­tion of mod­ern tech­nolo­gies, re­duc­ing en­ergy costs, im­prov­ing ef­fi­ciency and com­pet­i­tive­ness," she said.

Azer­bai­jan be­came a mem­ber of IFC in 1995. Since then IFC has in­vested al­most $393 mil­lion and lever­aged nearly $73 mil­lion from other lenders un­der 67 projects in fi­nan­cial ser­vices, in­fra­struc­ture, and man­u­fac­tur­ing.

IFC has also im­ple­mented ad­vi­sory projects fo­cused on pri­vate sec­tor de­vel­op­ment. In ad­di­tion, the State Oil Fund of the Repub­lic of Azer­bai­jan (SOFAZ) has com­mit­ted $350 mil­lion to three funds man­aged by IFC As­set Man­age­ment Com­pany that in­vest along­side IFC in pri­vate sec­tor projects in emerg­ing mar­kets.

IFC is the largest global de­vel­op­ment in­sti­tu­tion fo­cused ex­clu­sively on the pri­vate sec­tor. It helps de­vel­op­ing coun­tries to achieve sus­tain­able growth by fi­nanc­ing in­vest­ment, mo­bi­liz­ing cap­i­tal in in­ter­na­tional fi­nan­cial mar­kets, and pro­vid­ing ad­vi­sory ser­vices to busi­nesses and gov­ern­ments. In FY12, IFC in­vest­ments reached an all­time high of more than $20 bil­lion, lever­ag­ing the power of the pri­vate sec­tor to cre­ate jobs, spark in­no­va­tion, and tackle the world's most press­ing de­vel­op­ment chal­lenges.

Bank Re­spub­lika has been op­er­at­ing since 1992 and is one of the lead­ing banks of Azer­bai­jan. Among its share­hold­ers are two large Ger­man fi­nan­cial in­sti­tu­tions - DEG, a mem­ber of KfW bank­ing group, and SIDT, a mem­ber of Sparkassen-Fi­nanz­gruppe, with a share in the bank at a rate of 25 per­cent + 1 share.

Bank Re­spub­lika has a B2 rat­ing with "sta­ble" fore­cast by the in­ter­na­tional rat­ing agency Moody's In­vestors Ser­vice.


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