Business

Strategy to boost non-oil sector drawn up
A 3-year program of activities to boost the non-oil sector in Azerbaijan has been drawn up at a one day workshop at Quba Hall of the Hyatt Regency Hotel of Baku on Monday.
The workshop, a follow-up to the May 7-9 Investment Conference, was organized by the Ministry of Economic Development and the World Bank.
Intended to discuss and refine an Integrated Non-Oil Trade and Investment Strategy (INOTIS) for the rapid expansion of jobs and opportunities in the non-oil sectors of the Azeri economy the meeting reviewed  development of the private sector in Azerbaijan over the past year, the laws on the promoting entrepreneurship and their execution.
A number of senior government officials, representatives of the business community, donors, IFIs, and NGOs attended the workshop.
Mr. Christian Petersen, the World Bank's Leading Economist in ECA region and Manager for SAC-II, also took part in the event.
Minister for Economic Development Farhad Aliyev and Christian Petersen held a joint news conference on Monday on the workshop outcomes.
Elaborating on the strategy, the bank economist said the document would support the State Program on Poverty Reduction, adding that the WB is expected to allot 20m US dollar worth of credit to Azerbaijan in the fiscal year within the framework of poverty reduction program.
Mr. Petersen underlined that the Bank will also support the transparent privatization of telecommunications and transport.

400m USD required to upgrade chemical industry
A total of 400m US dollars are required for upgrading the chemical industry in Azerbaijan, President of the Azerkimya State Company Fikrat Sadiqov has told AssA-Irada.
He went on saying that the company was seeking foreign investments to bring the production of rubber, ethylene, ethyl-benzol into conformity with world standards.
Reminding of a credit agreement reached with the Japanese Bank for International Cooperation for ecologically safe manufacture of caustic sodium, Mr. Sadiqov said relevant documentation for allocation of credits would be completed next year.
Credit repayment
Azerkimya will complete repayment of credits borrowed for renewal of its enterprises, increasing their production capacity by the end of 2003. The company will repay 4.5-4.6m US dollars to Eximbank of Japan, as well as 2.6-2.7m US dollars to the Japanese company Nichimen. The total amount of overdue arrears of the company constitute 15m US dollars at present.
Talks continue between Azerkimya and EximBank of Japan for a loan to construct a chlorine plant. The company hopes to receive credit totaling 50-60m US dollars, although the sum has not yet been accorded. "To agree the size of the credit it is necessary to prepare a feasibility study for the project and to establish the approximate volume of chlorine production," the company president stressed.
"The construction work will begin in 2004, if we succeed to resolve the problem of financing for the project," he said.
Azerkimya is a monopoly chemical producer in Azerbaijan.
Financial and tax auditing
The Ministries of Finance and Taxes have been auditing the State Company since April at President Heydar Aliyev's instruction.
Mr. Sadiqov has told AssA-Irada it is too early to speak of the outcomes of the auditing as a final act has not been prepared yet.
Nevertheless, he confirmed the use of extra expenses for production at Azerkimya. Mr. Sadiqov also noted that the company is obliged to repay arrears of enterprises once at its disposal, but later privatized.
Touching upon the mutual debts between Azerkimya and the Taxes Ministry, Mr.  Sadiqov said the company owes 11bn manats to the Ministry, while the Ministry's debts constitute 9bn manats.
Azerkimya's arrears make up 550bn manats, while its credits total 2trln manats, according to Mr. Sadiqov.

BP support rural cheese-making
A project to support the creation of four small cheese-making facilities in Quba and Ismayilli Districts has now been successfully completed, as part of the company's ongoing Social Investment Programme, BP has told AssA-Irada.
The project launched in mid-2002 has facilitated the creation of four small cheese-making facilities, with two in Quba district and another two in Ismayilli, to support and add value to dairy production, strengthen Livestock Farmer Associations, and to provide Azerbaijan's consumers with safe and healthy dairy products.
Construction of the plants and training of operators was made possible through the financial and in-kind contributions of BP, Land O'Lakes, a US-based organization, USAID and beneficiaries themselves.  The total value of the project is 67,130 US dollars of which 32,400 dollars came from BP, 17,010 dollars from USAID, and 17,720 dollars from beneficiaries and other private donors. The project was managed and implemented by Land O'Lakes, Inc., which is a USAID supported organization working in economic development, focusing on agriculture and agrarian business and has been active in Azerbaijan for three years.
The project is aimed at increasing high quality production, standardized and value added dairy products, as well as increasing product safety and marketability through superior hygiene and sanitation, expanding direct employment through new processing facilities, and increasing demand for milk produced by local farms and expanded profitability of milk production in the target communities.
Land O'Lakes and the Quba Livestock Association have jointly overseen implementation of the project. Following identification and selection of recipients for the plants through a competitive process, the project saw the conversion of transport containers into cheese-making facilities, procurement and installation of dairy processing equipment, including pasteurizes, heaters and cheese vats. Land O'Lakes delivered a continuous technical assistance in facility design and set-up, the installation of the processing equipment, and the production and marketing of white soft and yellow cheeses.
The facilities include the dairy processing plants Dogru yol Ltd. and Elvin Ltd in Begrov and Amsar villages of Quba District, as well as Ruslan 6 Ltd and Temp Ltd. in Talis and Qaramaryam villages of Ismayilli District.
The processing capacity of all the four cheese-making plants is identical which is 400 litres of milk per day each. With a small modification, the plants can double their capacity up to 800 litres per day each. As the facilities did not start all at once, the utilization level ranges from 25 percent to 100 percent with the average rate being 78 percent for all the four.

WB approves irrigation project
The World Bank's Board of Executive Directors on Tuesday approved a 35m US dollar worth of credit to Azerbaijan to support the Irrigation Distribution System and Management Improvement Project, which improve effectiveness and financial viability of irrigation water distribution and management for 56,000 hectares through provision of support to Water Users Associations (WUA) and the State Amelioration and Irrigation Committee (SAIC).
The project will provide funds for the development of WUA-related institutional capacity in SAIC, training and support to WUAs to become organizations that can take charge of the operation and maintenance of irrigation and drainage systems under their management, as well as selective rehabilitation of irrigation and drainage systems.
The project is the second World Bank-supported operation in the irrigation and drainage sector in Azerbaijan. The first project, Rehabilitation and Completion of Irrigation and Drainage Infrastructure Project, was approved by the Bank in 2000 and focuses on rehabilitation and completion of major conveyance irrigation systems and collector drains.
The primary activities of the project are assisting the Government in building capacity in SAIC to provide training and support to WUAs and assist in the rehabilitation and improvement of irrigation and drainage infrastructure.
It is expected that at the end of the project, Azerbaijan will have a sound institutional framework for sustainability of WUAs which will thus have the capacity to manage infrastructure under their responsibility, while the WUAs benefiting from rehabilitation and modernization would have reliable and sufficient supply of irrigation water. 
The credit is provided on IDA standard terms, with a maturity of 35 years, including ten years of grace.

Japanese gov't grants 216,000 USD
Japanese Ambassador to Azerbaijan Toshiyuki Fujiwara and officials of  local non-governmental organizations and medical institutions signed 6 agreements on approval of 216,000 US dollar worth of grants for Azerbaijan under the Japanese government's Grass Roots and Human Security program at the Japanese Embassy in Baku on Friday. Foreign Minister Vilayat Quliyev honored the ceremonial signing.    
The grants will be allocated for the projects on reconstruction of secondary school in   I Sahsevan village (81.440 US dollars) and improvement of water supply of the village (14,252 dollars), equipment of a hospital for IDPs from Qubadly District (45,723 dollars), construction of small school for IDPs in Barda District  (9,836 dollars), improvement of water supply of Padar and Yemisanli villages of Oguz District (41,328 dollars), and overall and equipment of a laundry at orphanage #2 (23,490 dollars).
Supported by the Japanese government Grass Roots and Human Security project has been functioning in Azerbaijan since 2000. Total grants to Azerbaijan constituted 180,765 US dollars in 2000, 788,852 US dollars in 2001, 1,029,000 dollars in 2002.

MicroFinance Bank's credits make up 1.5m dollars
The Azerbaijan MicroFinance Bank (AMFB) has allotted 1250 credits totaling 1.5m US dollars for its clients since its establishment last November. A source from the Bank has told AssA-Irada the clients have repaid 250 credits amounted to 500,000 US dollars so far.
The Bank will join the Western Union swift money transference system late this July, 
The AMFB, which approves 10,000 US dollar worth of credit with 3 percent interests to support small and medium business, was founded by the European Bank for Reconstruction and Development, the International Financial Corporation, the Black Sea Bank for Trade and Development, and the German LFS Financial Systems.

Republican Bank presents credit program
The Republican Bank held a seminar on the credits allotted by the German-Azerbaijani Foundation (GAF), their features and reception methods at the Irsad Hotel of Baku on Tuesday in a bid to support small and medium entrepreneurship. Addressing the event with participation of representatives from the Republican Bank, GAF and local companies, Deputy chairman of the Bank's Management Board Rafael Qasimov said the German Bank for Development (GBD) had allocated finance for the credit program on development of entrepreneurship in the country.
Updating the seminar attendees on the activities of the GAF, its Manager York Toymer said the Bank of Baku, Ilkbank, Parabank, Republican, and Unibank had been elected authorized banks by the Foundation. Mr. Toymer went on saying that the GAF had granted 400 credits totaling 5,5m Euros over the past two years, while it is planned to allot 280 credits amounted to 2.6m Euros. GAF Manager noted that the credits amounting from 300 to 5,000 Euros will primarily be granted to entrepreneurs engaged in commerce (20 percent per annum), production and service (18 percent), as well as for investment projects (15 percent).
The seminar was closed with the presentation of a credit program of the Republican Bank.