Washington, D.C., June 15, 2006
—The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to purchase up to a 17.5 percent stake in Azerigazbank and to extend a $1 million trade finance line. Azerigazbank is one of the largest private banks in Azerbaijan and provides services to micro, small, and medium enterprises.
Shahbaz Mavaddat, IFC’s Director for Southern Europe and Central Asia, noted, “One of our main objectives in Azerbaijan is to help strengthen private financial institutions like Azerigazbank. The IFC investment and trade finance line will assist in the development of the emerging MSME sector in Azerbaijan by increasing the availability of quality banking services and credit to micro, small, and medium enterprises.”
The IFC investment will provide much needed equity capital to Azerigazbank, supporting its rapid growth due to a steady rise in demand for quality banking services and term credit. The investment will strengthen the bank’s balance sheet, and the trade finance line will facilitate the company’s trade finance activities in one of the fastest-growing economies.
Jyrki Koskelo, IFC’s Director for Global Financial Markets, added, “IFC has had a strong institution-building role in the development of Azerbaijan’s financial markets. IFC’s equity investment in Azerigazbank, combined with technical assistance will help deepen, strengthen, and diversify the local financial sector.”
Chingiz Asadullayev, the Chairman of Azerigazbank Supervisory Board, commented, “We are pleased to take an almost decade-long relationship to the next level with IFC becoming a shareholder. The confidence IFC has placed in us demonstrates the strong position of Azerigazbank, allowing us to expand and to support our growing and young economy. We look forward to continuing and strengthening our partnership with IFC.”
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC
(
www.ifc.org
)
is to promote sustainable private sector investment in developing and transition 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 FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications.
