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Baku, Azerbaijan, February 16, 2007
– IFC, the private sector arm of the World Bank Group, today signed agreements to provide financing to the ADA Group, which operates Almali, the first local food retail chain in Azerbaijan. This will help the company provide consumers with the first modern and affordable grocery experience in Azerbaijan. IFC’s $18 million investment, comprising a loan of $12 million and equity/quasi-equity of $6 million, is the largest IFC financing to the country’s non-oil sector. The investment will support the ADA Group as it opens at least 50 grocery stores throughout Baku over the next three years.
The few supermarkets in Baku today cater mainly to expatriates and higher-income consumers who can afford premium prices. The Almali stores will target middle and lower middle–income consumers and help fill the gap between existing supermarkets and smaller traditional markets. This will give consumers more choice, greater convenience, and better access to quality goods, all at reasonable prices and in a modern setting.
“IFC’s investment was crucial for us to move forward with this exciting project, and we are glad to have IFC as a long-term partner,” said Sergei Ivashkevich, Chairman of the Supervisory Board of the ADA Group. “We see this project as complementing Azerbaijan’s existing network of small traditional markets. We anticipate that it will have trickle down effects as consumers purchase more goods, because they will have more variety available at affordable prices,” he added.
“Through this financing, IFC is supporting a domestic company in its efforts to bring more grocery options to local citizens across the income spectrum,” said Shahbaz Mavaddat, IFC’s Regional Director for Southern Europe and Central Asia. “The project will create over 2,000 jobs and develop linkages with local suppliers. This fits with IFC’s strategy for Azerbaijan to create jobs while supporting market diversification and the country's efforts to promote stronger supply and distribution networks in an important part of the economy.”
“Almali will foster competition in the food retail sector, and this will contribute to development of the agricultural and food processing sectors in Azerbaijan,” said Dimitris Tsitsiragos, Director of IFC’s Global Manufacturing and Services Department. “IFC also plans to assist the ADA Group in attaining best retail industry practices.”
About IFC:
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org
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