BAKU, Azerbaijan, September
25. The UK's Export Finance Agency (UKEF) has the
capacity to assume risk amounting to 5 billion pound sterling for
projects in Azerbaijan, Co-Head of Global Business Origination at
UKEF, Natalia Sergeeva, said during the 2nd Azerbaijan
International Investment Forum held in Baku today, Trend's correspondent
reports from the event.
According to her, a number of promising projects fail to
materialize not due to a lack of potential or ambition, but because
of limited access to long-term financing.
"UKEF can help address this issue. Our global portfolio
currently stands at approximately 60 billion pound sterling.
Regarding Azerbaijan, we have the capacity to underwrite risks
amounting to 5 billion pound sterling, that is, the capital is
available for use," Sergeeva explained.
She noted that the financing provided by UKEF is long-term in
nature, which is particularly important for infrastructure
projects.
"On average, we can offer financing terms of up to 15 years for
projects. For clean energy and other green projects, this period
can extend up to 22 years. This is a crucial factor for investors,
especially when they are concluding contracts with EPC contractors
or agreements for the procurement of goods," she emphasized.
Sergeeva mentioned that one of UKEF's key products is
guarantees, and the agency can cover up to 85 percent of the
contract value.
"Our guarantee is flexible regarding requirements for UK
content. Our core product is the guarantee itself, and we cover 85%
of the contract value. We underwrite 100% of the risk associated
with that 85% portion. This is particularly significant for
large-scale projects and impacts their economic viability," the
UKEF representative noted.
According to her, UKEF collaborates with banks, and the UK
government's AA credit rating plays a crucial role in the
assessment of financing.
"Banks determine the cost of capital based on the UK
government's credit rating—the 'AA' rating. Consequently, the
economic terms of financing backed by UKEF are quite attractive,"
Sergeeva said.
She added that UKEF could also support the expansion of
cooperation opportunities across various sectors in Azerbaijan.
"We can help establish connections with organizations in the UK
that have access to various industries and entities. We work with
business and trade, innovation, science, and commercial structures.
We also have established long-term supply chains across various
industrial sectors," she noted.
According to Sergeeva, as Azerbaijan plans to diversify its
economy across various sectors, UKEF can provide support during the
initial stages of this process.
"As Azerbaijan considers diversifying its scope of activity
across sectors, we can assist in this regard, starting from the
initial discussions," she stressed.
The UKEF representative said that cooperation with international
banks, other export credit agencies, and international financial
institutions enables the mobilization of additional capital.
"UKEF’s collaboration with international banks, provision of
expertise, and engagement of other export credit agencies and
international financial institutions help create opportunities and
mobilize additional capital. Capital markets are also a vital tool,
and for Azerbaijani projects and companies, this is one of the
options on the table," noted Sergeeva.
She spoke positively of Azerbaijan's economic indicators and its
portfolio of projects across various sectors.
"We see that Azerbaijan’s fundamental indicators are strong and
that a portfolio of ambitious projects is taking shape across
various industrial sectors. UKEF’s primary goal is to ensure that
no project fails due to a lack of access to financing," added
Sergeeva.
