BAKU, Azerbaijan, October 6. The Asian
Development Bank (ADB) is using guarantees, blended finance,
technical assistance, and other innovative financial instruments to
support the attraction of private investment in Azerbaijan, the
Country Director for the Asian Development Bank (ADB), Sunniya
Durrani-Jamal, said, Trend's correspondent reports.


She made the statement at the Azerbaijan-Germany Conference on
Strategic Partnership and Connectivity in Baku today.


According to her, the ADB’s partnership strategy with Azerbaijan
is aimed at supporting the government’s development priorities and
promoting investment by working with various stakeholders in the
ecosystem at different stages.


Durrani-Jamal noted that one example of the ADB’s activities in
Azerbaijan is the project related to the development of the Shah
Deniz gas field.


“About ten years ago, the government was developing the Shah
Deniz gas field. At that time, the risks were assessed as very high
for various reasons, including technical and commercial risks. At
that stage, the Asian Development Bank provided commercial banks,
including several international commercial banks, with a partial
loan guarantee of approximately $500 million,” she said.


According to an ADB representative, this mechanism helped
attract international investors to the project and may enable local
commercial banks to participate in similar projects in the
future.


She also cited renewable energy projects as another example of
the ADB’s activities in Azerbaijan.


“Together with the EBRD and several other partners, we have
financed some of the country’s first renewable energy projects,
particularly solar energy projects,” Durrani-Jamal said.


According to her, the ADB aims to provide financing to the
private sector on commercial terms. However, in the early stages of
developing new sectors, mechanisms such as blended finance are used
to mitigate risks.


“When it comes to a new sector, we use tools such as grant
financing or technical assistance to help mitigate risks and
potential risks for the first few projects. We do not lower the
interest rate, but we provide additional funds that can reduce the
actual costs and risks of the operations,” she said.







Sunniya Durrani-Jamal noted that the ADB is also working to
promote exports and imports in Azerbaijan. She stated that the
bank’s trade and supply chain finance program is collaborating with
commercial banks to help small exporters and importers manage the
risks they face.


“This is an area with great potential, although it does not
involve direct investment. In particular, it helps establish
connections between small organizations and international banks and
exporters who may not be familiar with them. We use our connections
to facilitate this process,” the ADB representative said.


She also noted that he views the protection of natural capital
and biodiversity in the infrastructure sector as one of the new
investment opportunities.


“It is very important to view investments in nature within
infrastructure as real and tangible, just like investments in
infrastructure projects made of concrete and brick,” Durrani-Jamal
emphasized.


According to her, projects related to natural capital and
biodiversity can attract concessional financing and socially
significant investments. He also mentioned “green” bonds and
“green” financing as tools that can be used in the development of
innovative infrastructure.


The ADB’s Country Director for Azerbaijan noted that cooperation
with state-owned companies is also an important component of the
bank’s strategy.


“Most of the infrastructure in Azerbaijan is still being built
by state-owned enterprises. Therefore, our strategy is to work with
several key state-owned enterprises to help improve their corporate
governance and financial performance, business strategies, as well
as environmental and social performance,” she said.


S. Durrani-Jamal stated that this process could enable some
state-owned companies to conduct an initial public offering (IPO)
and gain access to more private capital in the future.


“In addition, we are collaborating with the Ministry of Finance,
the Central Bank, and the Ministry of Economy to work on policy
reforms that can help attract private investment,” the ADB
representative added.