EBRD gears up to finance agricultural sector of Azerbaijan

By: Gulgiz Dadashova

The European Bank for Reconstruction and Development considers the possibility of investing in the agriculture sector of Azerbaijan and studies the prospects for the agricultural development.

Agriculture Minister Heydar Asadov and EBRD Baku Office Head Neil McKain have mulled preparation of new financial framework in connection with the EBRD lending agricultural sector, the ministry reported.

Asadov praised the role of the Bank’s projects in agricultural development, and noted that Azerbaijan created a favorable investment environment in the agrarian sector.

The minister informed McKain about the areas requiring investment, noting the expediency of realizing joint projects to create agro-parks.

“I propose the EBRD to consider the issues of creation of agro parks in Azerbaijan with Bank’s support and form new financial framework for the financing of agricultural loans,” Asadov said.

McKain, in turn, said the EBRD attaches importance to the development of agro-parks and logistics bases, realization of new projects on the storage of products and investing in the restoration of rural roads to improve the ability of farmers to sale their products.

The Bank will continue to make efforts for further development of cooperation with Azerbaijan, he stressed.

The agriculture sector development is one of the priorities of Azerbaijan’s economic policy. The country has made great progress in reforming and developing its agricultural sector and improving national food security.

In general, Azerbaijan has experienced a strong growth of all indicators of agricultural development in the past ten years. The total volume of production of agricultural goods increased by 3.4 times, and the volume of investment made in Azerbaijan’s agriculture increased by 15 times, and the average monthly wage of workers of this sector increased by 9 times in the mentioned period.

EBRD covers the whole spectrum of corporate, financial and infrastructure sectors. In Azerbaijan, it has financed among others financial intermediaries (banks, microfinance institutions, leasing and insurance companies), corporate clients in natural resources, agribusiness, construction materials and telecommunications as well as several infrastructure projects in the transport and power sector.

The EBRD has been active in Azerbaijan since the country’s independence. To date the Bank has invested in 146 projects with over US$ 2.5 billion across various sectors of the Azerbaijani economy. The portfolio of the banks is as following: energy -37 percent, financial intuitions -14 percent, industry, commerce and agribusiness – 10 percent and infrastructure – 39 percent.