BSTDB interested in providing financing in Azerbaijan’s local currency – Dmitry Pankin

By Trend

The Black Sea Trade and Development Bank (BSTDB) is very interested in providing financing in local currency in Azerbaijan, Dmitry Pankin, BSTDB President said in an exclusive interview with Trend.

“We understand that financing in local currency reduces risks for clients and for the entire financial sector. The BSTDB already has experience in this regard. We have issued bonds in manats using the infrastructure of the national currency market and worked with local financial institutions on mobilizing the local currency. We are open and considering alternative options for getting access to the local currency, as there is a great demand both from the financial mediators and corporate borrowers,” said the BSTDB president.

New agreements with Azerbaijani banks

He noted that BSTDB will sign two new agreements with Azerbaijani banks.

“Under these agreements, our partners will get loans for supporting trade financing (exporters and importers) and small and medium-sized enterprises in the country. We are also ready to cooperate with local financial institutions as part of the joint financing of corporate clients with local currency as well. The possibility of financing in manats will be considered in all future operations taking into account the client’s request, specifics and risks of the project financed,” said Pankin.

Priorities of cooperation

He went on to add that the main priorities of the BSTDB in Azerbaijan are reflected in the strategy for 2019-2022 and are directly related to the Bank’s mandate on supporting the economic development of participating states and facilitating regional trade among them.

“We have intensified our contacts with Azerbaijan’s financial institutions and are preparing two new agreements with Azerbaijani banks. We are considering new projects for providing financial resources to financial institutions within our product line, which includes loans and guarantees for supporting trade financing, leasing, providing loans for micro, small and medium-sized enterprises, as well as for corporate and individual clients for promoting green economy. We continue to attach great importance to our cooperation with financial mediators for financing SMEs, with which we can’t work directly due to some objective reasons, as well as the principle of non-competition with local financial institutions,” said Pankin.

BSTDB President pointed out that one of the Bank’s priorities is to support the energy sector and create a modern infrastructure using the cutting-edge technologies and meeting environmental requirements in order to reduce the adverse affect on the environment.

“Direct support to enterprises (medium-sized and large companies) in different spheres of economy, including agriculture, food production, manufacturing of equipment and instruments, chemical industry, transport, logistics and tourism is also our priority. We pay special attention to environmentally friendly projects, which increase the export potential and apply sustainable economic and technical standards and practices. We are in contact with state and private institutions in order to fulfill these priorities, but for now, these initiatives are at an early stage of development,” said Pankin.

New projects

He went on to add that the Board of Directors of the Black Sea Trade and Development Bank has approved three projects worth $40 million in Azerbaijan since early 2022.

He noted that these projects are related to the spheres of energy and finance.

“We have signed an agreement with Azerbaijan’s state oil company SOCAR only on one of these projects. We expect to sign agreements on the remaining two during the upcoming business forum to be held June 24, 2022,” said Pankin.

Pankin noted that BSTDB has started the work on a new project in Azerbaijan’s energy sector in 2022 with participation of the state oil company SOCAR as a sponsor.

“However, the deal is yet at an early stage,” he explained.

Pankin noted that the Bank has been successfully cooperating with SOCAR and its subsidiaries for several years.

“We have provided a loan to SOCAR Türkiye within our energy project, which was fully repaid in 2021. Moreover, as part of the BSTDB trade financing portfolio, we provided revolving line of credit for working capital financing to Socar Trading,” he explained.

Bank's portfolio

Pankin pointed out that the portfolio breakdown of the Black Sea Trade and Development Bank (BSTDB) for Azerbaijan is as follows: support for small and medium-sized enterprises (47.5 percent), energy (35 percent), real estate (8.4 percent), consumer goods (4.8 percent) and industry (4.4 percent).

“The BSTDB has financed 39 projects worth over half a billion euros in Azerbaijan since the start of operations in line with the investment priorities of the government. The Bank has been engaged in such important energy projects as Shah Deniz, at the same time focusing on SMEs in the non-oil sector. This week we will meet with interested companies here in Azerbaijan and I am confident that this will contribute to further development of business projects in the country,” added the BSTDB president.