EBRD Presentation | Business Forum Paris 2013

EBRD in Azerbaijan

Challenges and Opportunities

Legal and Institutional Framework to Attract investment

Paul-Henri Forestier Director, Caucasus, Moldova and Belarus EBRD

EBRD – Committed to Developing the Private Sector EBRD Activities In Azerbaijan •!130 projects of which 117 in the private sector •!Net cumulative business volume: US$ 2bn •!Portfolio: US$ 846m •!16 projects signed in 2012 – all private sector Public/Private sector share

Private sector portfolio

Business Climate Challenges and Priorities Challenge:

EBRD Response:

1. Improve the business climate to promote diversification and competition Government reforms starting to show some results with growth in the non-oil economy of almost 10% in 2012, similar levels projected in 2013 2. Enhance the ability of the financial sector to support growth Consolidation in the banking sector Stronger financial institutions 3. Further improve measures to reduce corruption and create incentives for transparent business practices Register of all government inspections held by ministry of justice – a positive step, Plans to increase in electronic and other non-cash payments

EBRD is increasing the number of direct investments in mid-sized corporates in many sectors and regions and is ready to do more

EBRD is ready to support consolidation with investment and technical assistance to build solid partner institutions

EBRD’s advisory and investment programmes work to improve all aspects of corporate governance to equip clients for transparent sustained growth Lessons learned from doing business inform our policy dialogue with our government partners

EBRD uses a range of flexible financing instruments in Azerbaijan Financial Institutions: the EBRD is engaged with banks, MFIs and other FS providers to develop the sector, build solid institutions and foster entrepreneurship: •!micro and small business lending programmes, •!equity investments and subordinated debt •!support for other financial services (such as insurance and leasing), •!Trade Facilitation Programme •!Development of local capital markets Corporates: EBRD works in many sectors, from building materials to food processing, supporting foreign and local investors: •!Debt and equity instruments for foreign investors: e.g.

Holcim Azerbaijan •!Direct loans and equity for mid-sized local corporates of up to EUR 10m – e.g. MPro

EBRD – Improving the investment climate Client Focused Technical Assistance EBRD’s advisory programmes work to improve all aspects of corporate governance to equip clients for transparent, sustained growth e.g.

•!Pre-investment accountancy standards improvement for small clients •!Loan officer training and institution building for local banks •!Enterprise Growth and Business Advisory Services programmes use foreign and local expertise to develop Azerbaijani SMEs Practical Policy Dialogue •!Lessons learned from doing business inform our policy dialogue with our government partners •!EBRD as an honest broker, resolving issues with government partners – blazing a trail for foreign and local investors •!Legal Transition Programme – development of secured transactions law, foreign investment protection law, mortgage registry reform, public procurement standards

Thank you