BP on behalf of its co-venturers, through its Regional Development Initiative, yesterday signed a $1 million grant agreement with the International Finance Corporation (IFC), a member of the World Bank Group, to support access to finance for micro and small enterprises (MSE) in Azerbaijan’s western regions.
This new project will enable the Micro Finance Bank of Azerbaijan (MFBA) to expand its branch network to the towns of Mingechevir and Gazakh through opening one new branch in each of these towns, as well as to enhance services in its Ganja branch. The expansion is matched by $2.3 million of IFC’s and MFBA’s own investments through a separate agreement.
This follows the successful launch of the Supplier Finance Facility (SFF) - an important project in support of local business development funded by BP and its co-venturers jointly with IFC, and implemented by MFBA.
The new project is designed to help provide access to loans to MSEs and entrepreneurs in the trade and agriculture sectors, as well as improved financial intermediation. BP’s and its co-venturers’ contribution will be specifically used to finance international credit experts and the development of professional local loan officers and branch managers.
“We believe the project will have sustainable positive effects on private investment, job generation and the socio-economic situation in the affected regions. While this is an important expansion to our local business support efforts, during its implementation preferences will be given to supporting access to finance in the communities where BP has interventions on economic development - along the Baku-Tbilisi-Ceyhan (BTC) and South Caucasus Pipeline (SCP) routes. However we expect that by introducing up to date international banking practices the project will also bring benefits to much broader groups of small businesses in the western regions of the country,” says Bill Schrader, BP’s President in Azerbaijan.
“This new project is part of a large multi-year program of investment and capacity building that IFC, BP and its co-venturers have jointly financed and implemented in Azerbaijan to support micro and small enterprises in general and to increase the positive impact of the BTC pipeline on local firms and suppliers” said Shahbaz Mavaddat, IFC Director for Southern Europe and Central Asia.
Notes to Editors:
BP is the operator of Azerbaijan’s major oil and gas development and transportation projects and has set an ambitious new target to double the value of contracts placed with Azerbaijan-owned companies by 2010. To reach this target, BP re-launched the Enterprise Centre in Baku last year to enhance its support of local small and medium-sized enterprise (SME) development. Our direct in-country spend with local Azerbaijani SMEs during the first three quarters of 2007 equaled $80 m which is more than what was spent during the same period of 2006.
BP and its co-venturers are also funding the Supplier Finance Facility (SFF) – an important initiative aimed at supporting local business development through the provision of transparent sources of funding for small and medium-sized enterprises.The SFF is designed to give Azerbaijan's local oil and gas industry supplier and service enterprises greater access to transparent sources of finance. It is a joint credit facility established by BP on behalf of its co-venturers and the International Finance Corporation (IFC).
BP also sponsors the Best of Business local enterprise awards as part of its encouragement of local business development. The awards recognise outstanding local and international companies and business personalities whose entrepreneurial skills contribute to the success of BP-operated oil and gas projects and make a lasting impact on the local business environment.
The driving force behind these initiatives is BP’s commitment to the sustainable economic development of Azerbaijan. BP is also working to develop a number of other initiatives to encourage the enterprise development throughout Azerbaijan to assist the country in diversifying its economy through our Regional Development Initiative, our Community and Environmental Investment and Cultural Heritage Programmes, as well as educational sponsorships.
Tamam Bayatly at BP’s Press Office in Baku, telephone: 994 (0) 12 599 4557