Priorities
The EBRD’s objectives in Azerbaijan are to: engage actively in sector reforms, support the corporate sector and promote the growth and development of micro, small and medium-sized enterprises in the non oil and gas sectors; continue its leading role in developing and strengthening the financial sector; contribute to the rehabilitation and commercialisation of Azerbaijan’s infrastructure; and continue policy dialogue with authorities to improve the country’s business environment.
Enterprise sector
The EBRD will contribute to the development of the non-oil sector by making direct debt and equity investments and via support to the financial sector. Micro-, small- and medium-sized enterprises will continue to be the primary target for these investments, using the instruments available under the Early Transition Countries (ETC) Initiative. Financing will also be provided to medium-sized enterprises, together with local banks, through co-financing facilities and the Bank will seek opportunities for larger scale debt and equity investments alongside local and foreign investors. Further support through the TurnAround Management (TAM) and the Business Advisory Service (BAS) programmes will be provided to corporates in Azerbaijan.
Financial sector
Focus will be on improving competitiveness, and increasing the capitalisation and consistency of regulation within the sector. The Bank will also seek further opportunities for equity investment in the sector, particularly within the context of consolidations and mergers. Investments in the non-bank financial sector, such as non-bank microfinance institutions, insurance and leasing will be considered. A special emphasis will be on the provision of financial resources to regions outside Baku.
Infrastructure and energy sectors
The EBRD aims to focus on transport, energy, municipal infrastructure, and environmental clean-up. There continues to be potential in the oil and gas sector for smaller investments in secondary and tertiary recovery projects and onshore production. The Bank will also try to tackle the issues related to natural gas storage capacity as well as utilising the Clean Development Mechanism under the Kyoto Protocol for carbon credits. There are also a number of areas which may require the Bank’s financing within the framework of Azerbaijan’s growing role as an energy transit country and the country’s efforts to clean up its polluted environment.
Policy dialogue
In close cooperation with other international financial institutions (IFIs) and bilateral donors, the Bank will continue its policy dialogue with national authorities, the local business community and foreign investors on the actions needed to improve the business environment, including legislative and regulatory reform as well as institutional strengthening.
