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Baku, November 10, 2003
—The International Finance Corporation, the private sector arm of the World Bank Group, has partnered with BP, Statoil, Unocal, GTZ (German Technical Cooperation), and the Baku Enterprise Center to commence implementation of a program to help local businesses and suppliers benefit from investments in the oil industry, in particular the Azeri, Chirag, and Deepwater Gunashli (ACG) oilfield and the Baku-Tbilisi-Ceyhan (BTC) pipeline projects. IFC is contributing $100,000 to the program, the total cost of which is $625,000.
This program, which is linked to IFC proposed investments in the ACG and BTC projects, is part of IFC’s strategy of working closely with its clients and partners to provide developmental support through SME Linkage Projects to major projects, in particular in extractive industries. This support is directed at expanding the local supply and distribution chains to create more opportunities for smaller businesses and to assist in sustainable community development efforts.
“We are delighted that the IFC linkage initiative is now underway in Baku,” said Mr. Peter Woicke, IFC’s Executive Vice-President. “The key strength of this program is the partnership between IFC and BP, Unocal, Statoil, GTZ, and the Enterprise Center—all providing money, time, and knowledge towards the success of the initiative. This will help ensure that the assistance is market-focused with all players bringing expertise to the table.”
The objective of the program is to better equip Azeri businesses to participate in business opportunities related to the on-going oilfield developments. The program focuses on helping companies overcome obstacles preventing them from winning contracts related to the projects.
Approximately 30 local companies are taking part in the program and come from sub sectors that the project team has already identified as providing long-term opportunities when the oilfield projects come on stream. Each company is undergoing a “diagnostic” review to establish what sort of technical assistance is needed. The assistance will then be tailored to their needs and provided over a period of one year, addressing issues such as business planning, assistance with access to capital, management training, and the attainment of standards required by the international business community based in Baku.
Also included in the linkage program will be the generation of an “SME map”, which will describe the business environment in which local companies operate, including access to enterprise support services and finance.
The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.7 billion for its own account and $6.6 billion held for participants in loan syndications.
