Today.Az » Business » International loans in Azerbaijan: offer more benefits
30 March 2012 [16:11] - Today.Az
Azerbaijan's public external debt increased 24.9 per cent in 2011.
According to the governmental report as of 2011, the index of the
country's external debt reached $4.817 billion as of January 1, 2012,
whilst that of January 1, 2011 hit $3.857 billion.
This index increased by almost a quarter. It is associated with the
expansion of Azerbaijan's cooperation with various international
financial organisations, as well as donor countries. As a result, about
12 loan agreements worth about $1.67 billion were signed in 2011 to
finance significant projects for the country's economy.
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International financial organisations
|
Number of loans
|
Sum, mln dollars
|
|
World bank
|
4
|
175,4
|
|
Islamic development bank
|
2
|
131,2
|
|
Czech Komer?ní banka
|
1
|
318,6
|
|
European reconstruction and development bank
|
1
|
750
|
|
U.S Eximbank and BNP Paribas New York branch
|
1
|
116,6
|
|
French Sosiete Generale bank and Sumitomo Mitsui bank corporation
|
1
|
98
|
|
Abu-Dhabi development fund
|
1
|
60,7
|
|
International Fund for Agricultural Development (IFAD)
|
1
|
19,4
|
Consequently, about a third of Azerbaijan's external debt falls to
the debts of the international financial institutions. On the one hand,
this part of the external debt cannot be considered as a market one.
This makes the structure of borrowing non-optimal.
Looking at this situation from the other side, one should recognise
that no financial activity in the world today is implemented without a
loan. Therefore, there is a problem with the terms, rather than taking
money on credit, borrowing or not.
For example, there is no need for the full support of the state
budget and the replenishment of currency reserves. Azerbaijan should
fulfil all the requirements of the international financial institutions
which are sometimes unacceptable for the country.
Now a transition is being made to more 'point' projects in selected
sectors. There are many such areas - education, health, transportation,
institutional development. The international banks' funds are ensured by
relatively cheap and long term loans, followed by a 'know-how' and
experience in solving similar problems in other countries.
Therefore about $2.215 billion fell to concessional loans among the
foreign loans used by January 1, 2012. About 3.8 per cent of external
debt must be returned to creditors in a period from five to 10 years,
56.4 per cent from 10 to 20 years and 39.8 per cent in a period of more
than 20 years.
The country would lose much and fail to do anything without
international loans. The most important thing is that international
loans allow Azerbaijan not to lose time.
In 2011, the implementation of 10 projects in the construction of
roads, seven in the water and sewerage system reconstruction, seven in
the social area, six in the electricity sector, five in agriculture,
land reclamation and irrigation, four in the financial sector and three
in the transport sector and the environment was continued backed up by
foreign loans in the country.
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