BP and its co-venturers have today launched the Supplier Finance Facility (SFF) – a ground-breaking initiative aimed at supporting local business development through the provision of transparent sources of funding for small and medium-sized enterprises.
A pilot supplier finance facility project was launched last year and its success has led to the development of this new initiative. SFF Phase Two provides access to a further $15 million of financing to BP’s local contractors.
Of this, $6 million has been funded by BP and its co-venturers. The IFC and MFBA have contributed $6million and $3million respectively.
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).
The IFC has signed a separate agreement with the Micro-Finance Bank of Azerbaijan (MFBA) to implement the SFF.
"BP and its co-venturers are pleased to have the opportunity to foster the development of Azerbaijan’s local enterprises," says Bill Schrader, President of BP Azerbaijan. "SFF is more than funding, as it combines the strengths of each of the partners to improve access to finance - so that local companies can take a bigger share of our supply chain. We believe this will promote their broader participation in their country's economic growth."
Local companies eligible to receive SFF loans will be selected for competitive pre-qualification exercises by the Enterprise Centre. They will then pass through the MFBA credit appraisal and will finally be approved by the SFF Steering Committee comprising representatives of the three parties involved.
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 equaled $77 m in 2006 - a 15% increase on 2005.
BP also sponsors the Best of Business local enterprise awards as part of our 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 non-oil sector and support enterprise development throughout Azerbaijan to assist the country in diversifying its economy through our regional development initiative, our community investment programmes and educational sponsorships.
Tamam Bayatly at BP’s Press Office in Baku, telephone: 994 (0) 12 599 4557