Baku, Azerbaijan, April 9th. Osman Haliyev, chairman of the Fund’s Management Committee under the Ministry of Economy of Azerbaijan, told Trend in an exclusive interview that green projects are one of the priority directions of the Entrepreneurial Development Fund (EDF).
“Green projects are a major priority this year. Entrepreneurs can use the Fund’s preferential financing mechanism to finance green energy projects and obtain loans at an annual interest rate of 5%. Three initiatives have been completed, one of which is to meet the energy needs of poultry farms by utilizing solar panels, and another to develop charging stations and accelerate electronic infrastructure development. “The third project will be dedicated to the creation of recycled construction materials, promoting the advancement of a closed-cycle economy,” he said.
Mr. Khariev stressed that such projects can be successfully implemented in different sectors of the economy, and expressed EDF’s readiness to finance any entrepreneurial endeavors, including green projects, on preferential terms.
Additionally, EDF said it has developed its own ESG model.
“The fund has developed an ESG (Environmental, Social and Corporate Governance) model that is consistent with international standards and has enabled us to identify the environmental, social and corporate governance aspects and potential risks of the companies we support. , the Fund is now actively working to reduce or prevent any identified risks in the future.” Hariyev emphasized.
The Chair noted that the Fund is passionately working on important issues such as creating new jobs and providing priority financial resources to women and young entrepreneurs.
“Projects financed by the Fund are expected to create 3,154 new jobs by 2023. Of these, 398 companies that received soft loans from the Fund belong to women and young entrepreneurs. ‘ added the Chairman.
In general, the Chairman said that EDF issued soft loans totaling 43.1 million manat (or $25.35 million) to finance 1,065 investment projects in the first quarter of this year.
Mr. Khariev said that the main purpose of EDF is to provide financial support to commercial organizations, promote cooperation between the state and entrepreneurs and create a favorable environment for exchanges.
“Currently, the fund is working with 21 banks, 9 non-bank credit institutions and 10 credit unions in the country to help businesses access favorable financial support.In the first three months of this year, , soft loans amounted to 43.1 million manats, or $25.35 million, disbursed to 1,065 projects through licensed credit institutions,” he said.
The Chairs emphasized the importance of cooperation with the private sector in implementing financial mechanisms to support entrepreneurship, such as soft loans, guarantees, subsidies and equipment financing. These mechanisms are implemented through licensed credit institutions.
“Priority financing will be allocated to projects in line with the priority areas outlined in 2024. These projects will be assessed by both credit institutions and the Fund to determine their potential economic contribution and impact on growth. Financing decisions are made on the basis of. In addition to cooperation with credit institutions, the Fund is actively involved in various entrepreneurial associations and clubs and holds regular meetings with their members, ”Khalyev said. added.
Referring to activities in liberated areas, the Chairperson noted that a special approach has been developed for the territories of Azerbaijan liberated from occupation to identify priority areas for preferential financing.
“Starting in 2022, the Fund started providing preferential financing to companies operating in liberated areas. To date, more than 14 million manat ($8.2 million) has been allocated to seven industrial and agricultural projects within these areas. “These regions will need to identify priority sectors for priority financing. Projects supported will include not only industry and agriculture but also the service sector.” he said.
According to the director, in early February of this year, the fund began introducing a system of guarantees and subsidies for entrepreneurs with the aim of stimulating economic activity and investment.
“We offer guarantees of up to 90% for business loans in the range of up to 5 million manats, with an annual interest rate cap of 15%,” Khalif explained, adding that projects in exempted areas will be provided with state guarantees. He emphasized that.
He pointed out that entrepreneurs are also eligible for subsidies on these loans, with the government subsidizing 10% of the annual interest rate for up to 36 months.
“We established an information system called “Electronic Loans and Guarantees” that allows entrepreneurs to apply electronically, streamlining the process and speeding access to financing. , it will create new opportunities for entrepreneurs across different sectors of the economy and help boost economic activity “in liberated regions,” he added.
Mr. Khariev emphasized that one of EDF’s strategic goals is to make financial mechanisms more accessible to entrepreneurs. He noted that one of the main benefits of digitization for entrepreneurs is increased access to capital.
“One of the main objectives of the Fund is to improve access to financing instruments by entrepreneurs. To achieve this, the Fund will enable entrepreneurs to “We are building capabilities that allow us to submit and apply for soft loans.” “The system’s ability to continuously monitor the application status is a hallmark. Furthermore, by integrating the information system with the ‘e-Government’ portal, Entrepreneurs can obtain relevant documents from the centralized database of other government departments,” he said.
Mr. Khariev believes that the benefits of electronic information systems contribute to the development of trust between the public and private sectors by ensuring transparency and expanding access to preferential financial resources for entrepreneurs.
In 2023, Azerbaijan’s Entrepreneurship Development Fund provided concessional loans worth 193.8 million manat ($114 million) to finance 3,276 investment projects.
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