IFC is implementing or has completed the following advisory projects:
CURRENT PROJECTS
Azerbaijan & Central Asia Microfinance Transformation Support Project
Azerbaijan Business Enabling Environment Project
Azerbaijan-Central Asia Leasing Facility
Azerbaijan Corporate Governance Project
Azerbaijan Energy Efficiency Survey Project
Azerbaijan and Central Asia Primary Mortgage Market Development Project
Micro Finance Bank of Azerbaijan/Supplier Finance Facility Project
SME Linkage Program
COMPLETED PROJECTS
CURRENT PROJECTS
Azerbaijan & Central Asia Microfinance Transformation Support Project
2008 – present
Supported with funds from the Ministry of Foreign Affairs of the Netherlands and IFC
The Project is centered in Almaty and its objectives are to assist and support Micro Finance Institutions (MFIs) based in Azerbaijan, Tajikistan, the Kyrgyz Republic, and Kazakhstan. It focuses on those institutions that wish to transform their activities from being traditionally credit based to being able to provide their customers with a broader range of financial services. Normally these services would include the acceptance of deposits and could also require profiling of institutions before they are able to obtain a full banking license.
In keeping with the IFC strategy for Central Asia, which is to support competitiveness of the private sector in areas with social development aspects such as micro loans to the poor, IFC brings additionality through the Project by aiming to combine advisory services with investment funds. This leverages the effectiveness of both components in enabling MFIs to expand their outreach and services and thereby help their clients to raise their standards of living and improve their livelihoods.
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Azerbaijan Energy Efficiency Survey Project
2008 – present
Supported with funds from IFC
The main goal of the project is to assess the current market for energy efficiency financing in Azerbaijan and to raise awareness among local financial institutions, small and medium enterprises (SMEs), and policy makers about existing opportunities for energy efficiency financing in the country. Similar surveys have been conducted in Russia, Ukraine, Armenia, Georgia, and Belarus.
By identifying best practices in SME energy efficiency and finance, the survey will also provide benchmarks with other countries and might lead to a more comprehensive program to increase energy efficiency in Azerbaijan and the region.
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Azerbaijan Business Enabling Environment Project
www.ifc.org/azbee
2008 - present
Supported with funds from the State Secretariat for Economic Affairs of Switzerland (SECO) and BP on behalf of its co-venturers
The project works to improve the business climate in Azerbaijan by streamlining select administrative procedures, such as registration, permits and licensing, thereby removing key regulatory barriers to business entry and operations.
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Micro Finance Bank of Azerbaijan/Supplier Finance Facility Project
2007 – present
Supported with funds from BP and its Oil & Gas Partners
The project leverages the large oil and gas presence in Azerbaijan to help develop local SMEs around BP’s supply chain. The project works to expand access to finance for local suppliers through the $15 million Supplier Finance Facility and Micro Finance Bank of Azerbaijan.
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Azerbaijan and Central Asia Primary Mortgage Market Development Project
Phase 1, 2005 – 2006, supported with funds from the State Secretariat for Economic Affairs of Switzerland (SECO)
Phase 2, 2006 – present, supported with funds from the Ministry of Economic Affairs of the Netherlands and the State Secretariat for Economic Affairs of Switzerland (SECO)
The project focuses on improving the housing finance legislative framework in Azerbaijan and Central Asia by building institutional capacity for mortgage lending and raising mortgage awareness. By partnering with policymakers, banks, and key stakeholders in the mortgage market, the project works to increase access to affordable housing in Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, and Uzbekistan.
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Azerbaijan-Central Asia Leasing Facility
www.ifc.org/acalf
2005 – present
Supported with funds from the State Secretariat for Economic Affairs of Switzerland (SECO)
The project facilitates the development of the leasing industry in Azerbaijan, Kyrgyz Republic, Tajikistan and Uzbekistan by strengthening the capacity of selected financial institutions, improving their Management Information Systems, and facilitating improvements in the regulatory framework for leasing in each country.
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Azerbaijan Corporate Governance Project
www.ifc.org/acgp
2003 - present
Supported with funds from the State Secretariat for Economic Affairs of Switzerland (SECO)
The project works to improve corporate governance practices at Azerbaijani joint stock companies and banks, thus helping them enhance their operations and increase their ability to attract financing and investment. To strengthen the national level of corporate governance, the project works with policymakers to improve corporate governance regulations throughout Azerbaijan. The project partners with educational institutions to assist them in developing corporate governance courses. The project also conducts a national public awareness campaign on the importance of corporate governance.
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The Challenge
Shareholder protection in Azerbaijan is among the weakest of the transitional economies. Legislation governing corporate governance and shareholder rights do not form a coherent system to regulate the private sector and the activities of joint stock companies. To compete in a market economy Azerbaijani companies and banks must improve management and corporate governance practices to become more attractive to creditors and potential partners, including foreign and domestic investors.
The IFC Approach
The project trains and consults banks and companies on corporate governance best practices and helps them adopt internal documents, including charter and by-laws, that stress better corporate governance practices. In cooperation with the government authorities, the project works to strengthen the regulatory framework for corporate governance. The project also works with educational institutions to introduce corporate governance courses and to train the next generation of managers and policymakers on international best practices. To raise public awareness on corporate governance, the project holds round table discussions with journalists, conducts public awareness events, publishes and disseminates a periodic bulletin and maintains the project web-site.
Achievements to Date as of July 1, 2008
- Enabled clients to attract $17.9 million in investment due to improved corporate governance practices
- Drafted 4 pieces of legislation that have been adopted by the Azerbaijani government, including amendments to the Civil Code on related-party transactions
- Trained more than 330 joint-stock companies and banks on improving corporate governance practices
- Helped the government establish a multi-agency task force to improve the legislative framework for corporate governance
- Developed model university corporate governance course adopted by 5 Azerbaijani universities and subsequently exported to other IFC corporate governance projects
- Translated OECD Principles of Corporate Governance into Azerbaijani, helping companies implement the principles more easily and better facilitate the development of a corporate governance legislative framework
SME Linkage Program
2002
Funded by IFC and Private Oil Companies
This program, which is linked to IFC’s proposed investments in the Azeri, Chirag, and Deepwater Gunashli (ACG ) oilfield and the Baku-Tbilisi-Ceyhan (BTC) pipeline projects, is part of the Corporation’s strategy of working closely with clients and partners to provide developmental support through linkages to major investment projects. Linkage projects have been particularly successful in the extractive industries.
The support is directed at expanding local supply and distribution chains to create more opportunities for smaller businesses and to assist in sustainable community development efforts. Specifically, the Azerbaijan small and medium enterprise linkage program is designed to improve the capacity and know-how of local Azeri companies active in the oil and gas service and supply sectors in order to help them benefit from investments in the oil industry. The Program’s clients benefit from (i) provision of targeted advisory services, (ii) improved access to finance and (iii) the creation of local business development service providers.
