Wednesday, 29 April 2020 08:47

Chakrabarti: EBRD will put things in the right direction

“We had positive prospects at the beginning of the year. If we look at the first quarter of the year, the economic growth still makes 1%, the growth in the non-oil sector makes 3%, and in the non-energy sector - 23%”, President of Azerbaijan Ilham Aliyev said at the yesterday’s video conference with President of the European Bank for Reconstruction and Development Suma Chakrabarti.

At the same time, tax concessions exceeded 3.5 billion manats or 2 billion dollars. This is a big burden for our budget, as a sharp drop in oil prices will negatively affect our foreign exchange reserves, the President said.

“As for the "green program", we take this issue very seriously. I was informed that we currently have 9 projects. The waste management project in Ganja has already been given a green light. I think the "Ganja-Green city" project can become a good example for other major cities of Azerbaijan. As far as renewable energy is concerned, we are very willing to do this. "In January, we signed preliminary documents with two experienced companies in the field of renewable energy, related to the construction of solar and wind power plants for 440 megawatts. We also have a serious drought observed this year. The water volume in storages is lower than ever. Even the older generation does not remember such a drought as last year. This is why irrigation is becoming a major infrastructure project. We need an electronic system to control over water resources. Once this is done, an evaluation of our infrastructure will be carried out. Sometimes our water losses reach even 40-50 percent, since these channels have completely lost all their qualities”.

In response, the President of the EBRD expressed gratitude for the completion of the swap agreement with the Central Bank in the amount of 50 million dollars. In the coming weeks we will make payments to the sum of 20 million euros within 5 different transactions. I believe that the past few months can be considered a great story for Azerbaijan. Your country is one of the few countries in the world, or perhaps the only one that achieved an economic growth in the first quarter of the year.

"Under favorable conditions, we plan to invest more than $250 million in Azerbaijan this year. To make this investment, we will need a sovereign and sub-sovereign guarantee. These projects mainly cover the public sector, including energy, infrastructure and ICT. This also includes the commercialization of some state-owned enterprises. We have discussed with You the “green package” worth $150 million, and we would like to put this issue back on the agenda.

 

As you know, we have already discussed the $150 million “green package”. We would like to use it. I want to know Your opinion about this. We are promoting this work together with Your government. As far as the power industry sector is concerned, we are offering to invest around 100-200 million Euros for its improvement. This is very important in terms of counter measures during the crisis and recovery. At the same time, there will be opportunities for making private investment in renewable energy sources. There is also the idea of a "green city". Azerbaijan was one of the first countries to join the “green city” initiative. From the point of view of the waste management project, Ganja joined this framework initiative in March. We suggest that it become the first project of the "green city".

 

We also have an offer related to Aztelecom Company. We have an important sub-sovereign investment project for 15-25 million euros. Broadband Internet will be expanded in the districts. This is also very important. This will also be significant for the recovery period after the crisis. We have a program for new important infrastructures. Our Council came to an agreement on it. We express our gratitude to the members of the Council. Procedures have been agreed at a high level. I would like to bring this amount to you earlier, earlier than usual. This will also happen on basis of that very new program.

As for irrigation, You told me a few years ago that this sector is particularly important in the agricultural sector. We would like to implement a pilot project in this regard and introduce certain new technologies in this sector. At the same time, we have proposed to create an insurance structure in this area, which we will finance”.

As S. Chakrabarti noted, we will continue to support renewable energy initiatives. The private sector is already showing its interest.

Over the coming week and month, we want to get onto commercialization and privatization of state-owned enterprises in the medium term. This can be done through a state investment holding. We are already working with the government in the legislative sphere over a formula of partnership between public and private sectors. We really want to help with the transition to commercialization and privatization of state owned enterprises. We are also working on creating a new Corporation on development of Azerbaijan. “As the European Bank for Reconstruction and Development, we want to “put things in the right direction”, the financier said. 

 

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