Upcoming SlideShare
Loading in...5







Total Views
Views on SlideShare
Embed Views



0 Embeds 0

No embeds



Upload Details

Uploaded via as Microsoft Word

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
Post Comment
Edit your comment


    • Economic News Bulletin, No. 33, June 2004 EMBASSY OF THE REPUBLIC OF AZERBAIJAN No 39, 2004 December Hügelgasse 2, A-1130 Vienna, Austria Tel.: + 43 (1) 4031322, Fax: + 43 (1) 4031323 Email: office@azembvienna.at Website: www.azembvienna.at Contact: Ms. Nargiz Qurbanova IN THIS ISSUE: FUEL & ENERGY FINANCE & BANKING ECONOMY AGRICULTURE ENVIRONMENT start exchanging electricity in March FUEL & ENERGY 2006. According to Mr. Ahmadian, this co- AZERBAIJAN, IRAN AND RUSSIA operation will allow the three countries SIGNED AN AGREEMENT to use each other's resources ABOUT AMALGAMATION OF simultaneously when there is a THEIR ENERGY SYSTEMS shortage of power or when unforeseen situations occur; besides, the energy Agreement on amalgamation of the system of Iran is thus put through to the energy networks of Azerbaijan, Iran energy systems not only of the Russian and Russia was signed at the meeting Federation but also of other CIS states of the heads of the national energy and Baltic States. authorities in Tehran last week. According to the chief engineer of According to the press-service of Azerenerji Marlen Askerov, by Azerenerji, it is planned to synchronize synchronizing energy systems of the the energy systems of the three three countries a strong energy axis countries and organize their parallel will be built in the region, given vast operation. The director general of Iran's territories covered in the mode of national energy company Tavanir parallel operation of the energy Mohammed Ahmadian is quoted as systems of the Commonwealth and the saying that the three countries would Baltic States as well as the access to exchange 500 megawatts of electricity. Europe, on the one hand, and development of the energy co- The power transmission lines are being operation between Iran and the Asian constructed and the three counties will countries, on the other hand. This axis will connect energy systems from
    • Economic News Bulletin, No. 33, June 2004 Europe to Asia, given efficient AMFB board Thomas Engelhardt, the organization and technical bank considers taking another credit accommodation. tranche from EBRD. The bank capital increased to USD 6.85 mln, therefore The head of Russia's RAO EES Russia the credit balance of USD 2.5 mln Anatoly Chubais said that this kind of should be enough to continue activities co-operation meant to the Russian side throughout the first quarter of next expanded geography of sales, a more year. The AMFB will consider mobile energy system and better borrowing credits from its other energy supplies to the provinces of the shareholders beginning in the second Federation. quarter of next year. It would be the best to raise money from individuals, 'This is a very important agreement in which the bank will start doing on 1 the key of solving energy system January. This would fully meet the problems of each country. The finance needs of the AMFB. synchronization will make it possible to make the energy systems steadier, The EBRD and the AMFB signed the which is vital in the peak operation USD 5 mln credit agreement on 6 seasons and under emergency October last year. The credit will be conditions', Mr. Chubais is quoted as disbursed in tranches equalling USD saying. 0.5 mln each. 'Our shareholders are ready to finance the bank depending on their credit FINANCE & BANKING limits per lessee ranging from fifty to one hundred per cent of their capitals', AMMB UTILIZED HALF OF THE Mr. Engelhardt said. EBRD CREDIT 25.6 per cent of equity of the AMMB is The Micro-Finance Bank of Azerbaijan owned by the International Finance (AMMB - AMFB) has spent up half of Corporation and as much to the Black the business development credit from Sea Trade and Development Bank. its shareholder, the European Bank for KfW owns 24.9%, the European Bank Re-construction and Development. for Re-construction and Development - According to the chairman of the 18.2%, and 5.7% of the bank equity
    • Economic News Bulletin, No. 33, June 2004 belongs to the managing company LFS legislation. The Board’s resolutions Financial Systems GmbH. will be of the advisory nature. The AMMB gave out 7.5 thousand BUSBANK WILL SERVE MKT credits of the total value of USD 15.75 AND PEPSI-COLA mln in two years of operations from 29 October 2002; the current portfolio of The United Universal Bank the bank equaled USD 5.6 mln (2661 (BUSBank) will serve the biggest credits) by the beginning of November. private companies of Azerbaijan after having secured as clients the Following development plans, the bank enterprises subordinated to the Ministry will have disbursed USD 28 mln in of Communication and Information twelve thousand credits by 2007. The Technologies. AMMB plans to start retail deposit services and issue of plastic cards on 1 According to the chairman of the board January and install automatic tellers of BUSBank Rauf Rzayev, the bank and promote e-banking at a subsequent won over seventy corporate customers stage. including twenty private companies including, in turn, MKT (all cotton THE FIRST MEETING OF THE operations) and Pepsi-Cola lately. INSURANCE BOARD IS BEING 'New clients accounted for twenty per PREPARED FOR cent of the bank incomes totaling AzM 6 bln in November', Mr. Rzayev The first meeting of the Insurance mentioned. Board of the Ministry of Finance of Azerbaijan should take place before the The bank continues the work on end of this year. enlarging its clientelle. 'We submitted business proposals to Azpetrol and The Insurance Board includes six Socar. The Ministry of Communication representatives of the Ministry of and Information Technologies is a Finance as well as representatives of strategic partner of ours rather than a seven leading insurance companies of client. We are in the process of the country. The main task of the preparing a project of developing the Insurance Board will be the system of electronic transfers improvement of the existing insurance
    • Economic News Bulletin, No. 33, June 2004 throughout the country’s territory', Mr. The Government of Azerbaijan will Rzayev added. cover the balance of the project budget in the amount of USD 9.9 mln. Azersu will cover the government's share in ASIAN DEVELOPMENT BANK Agdash and Geychay while the State WILL ALLOCATE USD 30 MLN Construction and Architecture FOR THE WATER SYSTEM OF Committee will finance operations in THREE AZERBAIJANI TOWNS Nakhchivan. The board of directors of the Asian There is also a technical grant of USD Development Bank (ADB) approved at 625 thousand (including 500 thousand the meeting in Manila on 8 December from the Special Fund of Japan) for the release of USD 30 mln for boosting the potential of providers and rehabilitation and construction of water governing institutions for new water distribution and sanitation systems in and sanitation systems. Agdash, Geychay and Nakhchivan. The implementation of the project must The project on improvement of water be completed in December 2010. supplies in small towns of Azerbaijan is within the budget of USD 39.9 mln, The pricing policy will be optimized, 75% of which will be bank credits of pipelines, chloration stations, aeration two types. The bigger percentage – systems, storage tanks and pump USD 20 mln – will be lent under the stations will be built within the scope ADB standard conditions, i.e. for of the project. The project also thirty-two years and with an eight-year envisages a financial reform and grace period. The interest rate will be capacity-building for the construction one per cent during the grace period and maintenance work, establishment and 1.5 per cent upon its expiry. Also, of new joint-stock companies in the USD 10 mln will be lent from ordinary public utility sector furnished with the capital resources of ADB, for twenty- modern management methods as well five years and with a five-year grace as financial efficiency and long-term period. The annual interest rate will be forecasting. based on LIBOR, the basic credit rate of ADB. USD 10.3 mln will be spent on rehabilitation in Agdash, USD 19 mln
    • Economic News Bulletin, No. 33, June 2004 in Nakhchivan and USD 7.7 mln in delegation to Azerbaijan on 5-7 Geychay. December. The British company Scott Wilson Head of the delegation, Deputy completed the project feasibility study Minister of Economy and Labour of for USD 740 thousand. Germany Karl-Ernst Brauner mentioned at the press conference in Baku that the conference would be held AZAL SIGORTA IS RAISING ITS at the beginning of next year. CAPITAL BY AZM 1 BLN 'There is no longer a need to conduct The insurance company AZAL Sigorta consultations about organizing the resumed the increment of its capital; conference in the format of the current AZAL Sigorta will issue shares worth visit. The parties have agreed on AzM 1 bln with the par value per share holding the conference and appointed equaling AzM 1 mln. the administrators. Probably, it will be necessary to have one more meeting of The authorized capital of the company, the organization committee in the which equals AzM 2 bln, used to be course of the preparations', Mr. shared between the International Brauner mentioned. Insurance Company (50% of equity), the insurance company MBASK (20%) The organisation committee is headed and AZAL (30%). AZAL Sigorta is in by Karl-Ernst Brauner and Deputy the top charts of the local insurance Minister for Economic Development of companies. Azerbaijan Mikayil Jabbarov. ECONOMY 'This will be an economic conference while attraction of investments will be ECONOMIC CONFERENCE ON one of items on the agenda besides AZERBAIJAN WILL BE HELD IN promotion of SMEs and development GERMANY EARLY IN 2005 of the alternative sources of energy', Mr. Brauner mentioned. Organization of a conference on Azerbaijan in Germany was discussed during the visit of the German business Consultations were initiated during the visit of the President of Azerbaijan
    • Economic News Bulletin, No. 33, June 2004 H.E. Mr. Ilham Aliyev to Berlin this social, internal-political and legal August. blocks, the European Commission will elaborate a report by spring next year on the South Caucasus states in which AZERBAIJAN WILL PREPARE A the democratic situation will be PLAN OF ACTION FOR highlighted. The report will also refer EUROPEAN UNION'S NNP IN to reports by international democracy 2006 and human rights watchdog organizations. The Government of Azerbaijan has begun to work on the individual If the report proves to be favourable in partnership action plan concerning co- general terms, the European Union will operation with the European Union embark on the closing-in plan. within the framework of the Wider Observation of the principles of Europe - Neighbourhood: New democracy, human rights, rule of law Framework for Our Relations with and independence of the judiciary will Eastern and the Southern Neighbours be a weight factor to promote co- (the NNP - the New Neighbourhood operation. Policy). New areas of co-operation will come According to Samir Veliyev, executive into being once Azerbaijan is included director of the Ministry of Economic in the New Neighbourhood Policy; i.e. Development of Azerbaijan, the work special attention will be given to closer will last during 2005-2006 and the plan energy, scientific and technical co- will be ready by the time the TACIS operation. Furthermore, a new national plan of action in Azerbaijan agreement can be signed following the runs out. The national plan covers the Partnership and Co-operation period until 2006. Agreement between Azerbaijan and the European Union, signed in 1996 and Azerbaijan was included in the NNP effective as of 1999. among other South Caucasus states at the EU summit on June 17-18. AZERBAIJAN CONSIDERS A NEW CHEMICAL PROJECT Apart from individual programs containing the political, economic,
    • Economic News Bulletin, No. 33, June 2004 The state-owned chemical company The capex of building the first Azerkimya is in negotiations with the industrial estate in Azerbaijan was Italian company Technomont on beaten down due to preliminary building a new plant in Sumgait to feasibility reporting. According to the produce polypropylene. Technomont Ministry of Economic Development, proposes to raise credits and act as a the capex should not exceed USD 15 general contractor of the project. The mln, following the preliminary value of the contract is estimated at feasibility report, while the costs of USD 150 mln. The Italian company building the Yeni Yashma estate in the can organize financing by the Italian Khizi province were estimated at USD Ex-Im Bank in the amount of USD 85 28156.55 thousand with the first phase mln while Italian commercial banks of the work estimated at USD 16797.71 can be tapped for the balance. thousand previously. The net costs of the first phase were estimated at USD The annual productivity of the 11.16 per cubic metre. proposed new plant is expected to It was planned to cover up to ten per reach 180 thousand tons of cent of the capex with the annual polypropylene. installments of enterprises - future tenants of the industrial estate. According to Azerikimya, Italian companies can finance this project The feasibility report is being run by without state guarantees provided. international donors including Turkey's Specialists of the company are Business and Technical Co-operation expected to come to Baku before the Agency (TIKA). The head of the TIKA end of this year for negotiations with Hakan Fidan will come to Baku on 14 the Government of Azerbaijan and for December and will meet the Minister submission of the preliminary project for Economic Development Mr. F. documentation. If the matter is Aliyev and other officials to discuss the approved, the funding can be made financing prospects. available as soon as next year. THE FIRST INDUSTRIAL The final costs of the project will be ESTATE IN AZERBAIJAN WILL calculated once the work plan is in CONSUME UP TO USD 15 MLN IN place. It is also planned to elaborate INVESTMENTS legal framework for the project, attend to the technical infrastructure issues,
    • Economic News Bulletin, No. 33, June 2004 involve local businessmen and Saatli accounts for more than 25% of management organizations in the the total while the crops have risen by project. 80% in comparison with last year. The average yield is 17.1 hundredweight The industrial estate will be built on 60 per hectare as against 13.2 hectares in the vacant area 49 km away hundredweight per hectare last year. from Baku. The estate will provide The highest yield - nearly 24 8-10 thousand jobs and 170 investors hundredweight per hectare - is the have shown interest. 237 allotments for achievement of Saatli farmers, while business development will be made. 23.7 hundredweight per hectare was recorded in Ter-Ter province, 20.2 hundredweight per hectare in Beylagan AGRICULTURE province, 17.9 hundredweight per COTTON STOCK-PILING IN hectare in Barda province and a little AZERBAIJAN IS OVER bit more than 17 hundredweight per hectare in Imishli province. As much as 133 thousand tons of cotton were collected and stock-piled The MKT company is the leading in Azerbaijan by 1 December, which is processor of cotton; under the contracts 34 thousand tons more than last year, signed with farmers, the MKT- according to the Ministry of controlled cotton fields covered 55.7 Agriculture of Azerbaijan. thousand hectares and about 92 thousand tons of raw cotton were The cotton fields cover 77.7 thousand stock-piled. hectares this year, which is 16% more compard to last year (about 67 MKT has fourteen cotton-processing thousand hectares). plants and exports the cotton fibre to Russia, Turkey, Italy and many other The biggest cotton crops were recorded European countries. in Saatli province - 33 thousand tons of cotton followed by Sabirabad, The second biggest company is AQRO, Bilasuvar, Imishli, Beylagan, Barda, which operates the Sheki-Ipek silk Neftchala, Agjabedi and Salyan factory and which took up provinces. approximately 25 thousand tons of raw cotton in 2004.
    • Economic News Bulletin, No. 33, June 2004 According to the Minister of Ecology The third leader is the Zhekot company and Natural Resources of Azerbaijan which processed approximately 7 Mr. H. Bagirov, introducing bio-gas thousand tons, while two private plants plants and using thermal waters could in Agdam and in Kurdamir provinces also be interesting for bilateral processed a little bit less than 10 cooperation. thousand tons. The projects will be identified in 2-3 It should be mentioned that the months and the feasibility studies and purchase price of cotton rose from contracts will be ready in four to five AzM 1200 to AzM 1600 in Azerbaijan months. in the past year. 'We plan to embark on implementing the projects by the end of next year or ENVIRONMENT by the beginning of 2006. This is an open process and private companies DENMARK IS READY TO will be granted access to it', Mr. FINANCE ENVIRONMENTAL Bagirov said. PROJECTS IN AZERBAIJAN 'Co-operation will be organized under According to the Memorandum of the Kyoto Protocol and the UN Understanding between the Ministry of Framework Convention on Climate Environment and Natural Resources of Change’, the plenipotentiary Azerbaijan and the Ministry of representative of the Ministry of Environment of the Kingdom of Environment of Denmark Morten Denmark recently signed in Baky, Pedersen mentioned, adding that the priority projects worth EUR 13 mln memorandum signed with Azerbaijan will be elaborated and submitted for covered a five-year term but can be funding. prolonged. Accumulation of associated gas to reduce air-borne discharges and economy of gas at the power stations are the two projects to be discussed in the nearest future.