Korean groups to invest $2bn in Azerbaijan

South Korean companies plan to invest $2 billion in Azerbaijan in the coming years, Economic Development Minister Heydar Babayev said.

Addressing the second meeting of the inter-governmental economic cooperation commission that started in Baku on Monday, he said Korean companies were greatly interested in expanding relations with the country, with a focus on investments in the non-oil sector, which is welcomed by Baku.

Babayev said the Korean side had already forwarded two projects to the Azerbaijani government for consideration, including one dealing with the energy sector. In addition to that, South Korean companies are interested in establishing a free economic zone in Azerbaijan and participation in building a shipyard.

A 70-people strong Korean delegation is attending the event, along with up to 50 Azerbaijani company executives and officials.

Korean Deputy Minister of Commerce, Industry and Energy Lee Jae Hoon said his country’s companies had developed six projects on cooperation with Azerbaijan. One of them envisions building a 700 MWt power plant in the country, while another one - transferring the Baku seaport outside the city. Korean companies plan to invest $300-400 million in the operations.

Another project concerns the development of Azerbaijan’s transport sector. Korean investors are also interested in the country’s information technologies and agriculture sectors, the deputy minister said.

He added that Korea was also ready to assist the resource-rich South Caucasus republic in the field of oil refining. As for prospects for his company’s participation in energy projects in Azerbaijan, Jae Hoon said a contract on the participating interest in the offshore Inam field would be signed by the year-end.

“I believe that talks are proceeding well on a Korean company’s acquiring a share in the development of the Inam block in the Azeri sector of the Caspian Sea and will be completed as soon as possible. The inter-governmental memorandum on cooperation in the oil and gas sector allows Korean companies to participate in other projects as well. Other important projects will be discussed at the meetings during my visit.”

The Korean official welcomed the suitable business climate provided in Azerbaijan for foreign investors. “We will capitalize on these favorable conditions to the fullest,” he added.

Minister Babayev said relations between Azerbaijan and South Korea were rapidly expanding.

“After mutual visits by the two heads of state, bilateral relations intensified, and the ideas put forth during the presidents’ meeting have already entered a stage of realization,” the minister said.

Deputy Minister of Economic Development Mikayil Jabbarov, elaborating of Azerbaijan’s investment opportunities, said South Korea was one of the leaders in the world for industrial development, while Azerbaijan had abundant energy resources, which provides good opportunities for cooperation between the two countries.

Discussions are also focusing on Korea’s experience in mechanical engineering, e-commerce and establishing industrial townships. The sides are considering projects on building a Baku circular road, setting up new power plants using alternate sources of energy and improving water supplies on the Absheron peninsula.

The two countries have already signed an agreement on the delivery of Korean buses to Azerbaijan.

The Azeri-Korean trade turnover in the first half of 2007 increased 80% compared to the same period of 2006 to reach $157 million. The figure is expected to exceed $300 million by the year-end.*