ADB ready to ex­pand project fi­nanc­ing in new spheres

Azer News - - Business - By Trend

The Asian De­vel­op­ment Bank (ADB) is ready to con­sider the pos­si­bil­ity of fi­nanc­ing projects in the sphere of agri­cul­ture in Azer­bai­jan, said Na­ri­man Man­nap­bekov, the head of ADB Baku of­fice.

"The ADB pri­or­i­tizes the spheres which are of pri­or­ity for the gov­ern­ment. That’s to say, if the Azer­bai­jani gov­ern­ment con­sid­ers it nec­es­sary that we should work for in­stance, in the sphere of agri­cul­ture, we will be ready to con­sider the rel­e­vant projects in this field," he said in an in­ter­view with Trend.

More­over, Man­nap­bekov pointed out that upon the gov­ern­ment’s re­quest, the ADB is ready to of­fer fi­nanc­ing for the de­vel­op­ment of the se­condary spe­cial­ized ed­u­ca­tion sphere in Azer­bai­jan and start to work with the coun­try’s Ed­u­ca­tion Min­istry.

"We have al­ready pre­pared a small ground and have pro­vided tech­ni­cal as­sis­tance so that the Min­istry of Ed­u­ca­tion would de­velop the skills of build­ing co­op­er­a­tion with ADB and adding a new con­tent to this co­op­er­a­tion," he said.

Talk­ing about the need for a state guar­an­tee for projects fi­nanced by ADB, Man­nap­bekov noted that when is­su­ing loans for pri­vate sec­tor projects, the bank does not re­quire a state guar­an­tee.

"As for pub­lic fund­ing, ba­si­cally, the Min­istry of Fi­nance acts as a bor­rower here, so no guar­an­tee is re­quired. But if the bor­rower is a state com­pany, for ex­am­ple, Az­er­ishig, then a loan agree­ment is signed with the com­pany and a guar­an­tee agree­ment is signed with the Min­istry of Fi­nance," he added.

ADB was founded in 1966 and has 67 mem­ber states. The bank’s head­quar­ters is lo­cated in Manila, Philip­pines. Azer­bai­jan be­came an ADB mem­ber on Dec.22, 1999. The coun­try ac­counts for 0.5 per­cent of the bank’s cap­i­tal.

The bank’s port­fo­lio in Azer­bai­jan is $2.8 bil­lion.

Man­nap­bekov fur­ther said that the Bank ex­pects the up­dated coun­try op­er­a­tions busi­ness plan (COBP) on Azer­bai­jan to be agreed in the coun­try’s gov­ern­ment by July 1.

“ADB works out, or up­dates coun­try op­er­a­tions busi­ness plan on a reg­u­lar ba­sis. We dis­cussed the up­dated ver­sion of the COBP with Azer­bai­jani gov­ern­ment of­fi­cials and sub­mit­ted it for con­sid­er­a­tion,” he said.

Man­nap­bekov noted that this year, the ADB will pri­mar­ily fo­cus on pre­par­ing the fea­si­bil­ity study for the North-South Trans­port Cor­ri­dor project, as well as ren­der­ing as­sis­tance in deep­en­ing struc­tural re­forms in the coun­try’s fi­nan­cial sec­tor.

“If the Azer­bai­jani gov­ern­ment re­quests for ADB as­sis­tance, it will be pos­si­ble to sub­mit the project for fi­nanc­ing the North-South Trans­port Cor­ri­dor for the ap­proval of the ADB Board of Di­rec­tors by late 2017,” he added.

The ADB may also con­sider pro­vid­ing funds for the sec­ond phase of the project on de­vel­op­ment of the largest gas and con­den­sate field Shah Deniz 2 if a re­quest is re­ceived from the Azer­bai­jani gov­ern­ment.

Man­nap­bayov re­called that for the first phase of the Shah Deniz 2 project, ADB ap­proved a loan worth $1 bil­lion, of which $500 mil­lion are bor­rowed funds of the bank.

"The loan, al­lo­cated from ADB funds for the Shah Deniz 2 project, is pro­vided through pri­vate fi­nanc­ing. There are two lines of fi­nanc­ing in the ADB: 75-80 per­cent of funds are al­lo­cated through state fi­nanc­ing and the rest-pri­vate fi­nanc­ing, "he said.

He noted that ADB car­ries out op­er­a­tional ac­tiv­i­ties pro­ceed­ing from the re­quests and pri­or­i­ties of the gov­ern­ment.

The ADB Board of Di­rec­tors ap­proved the al­lo­ca­tion of a loan for the sec­ond phase of the de­vel­op­ment of the Azer­bai­jani Shah Deniz gas field on De­cem­ber 7, 2016 within the frame­work of the South­ern Gas Cor­ri­dor project.

Azer­bai­jan and ADB signed a guar­an­tee agree­ment and an agree­ment on the al­lo­ca­tion of a $500 mil­lion loan for the Shah Deniz-2 project on May 7, 2017.

Shah Deniz re­serves are es­ti­mated at 1.2 tril­lion cu­bic me­ters of gas. Within Shah Deniz 2, an­nual gas pro­duc­tion will in­crease from the cur­rent 9 to 16 bil­lion cu­bic me­ters of gas. The cost of the sec­ond stage of de­vel­op­ment of the field is es­ti­mated at $25 bil­lion. The first gas will be re­ceived within the project in 2018 and it will be­come the main source for the South­ern Gas Cor­ri­dor.

The gas will be ex­ported to Turkey and the Euro­pean mar­kets through the ex­pan­sion of the South Cau­ca­sus gas pipe­line and the con­struc­tion of the Trans-Ana­to­lian (TANAP) and Trans-Adri­atic (TAP) pipe­lines.

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