BAKU, Azerbaijan, June 30. BSTDB expects Baku
meetings to boost its project pipeline.
"The Black Sea Trade and Development Bank (BSTDB) expects the
upcoming Annual Meeting and Business Forum in Baku to provide an
important platform for strategic dialogue with shareholders,
authorities, business representatives and other partners. Beyond
the formal discussions, the meetings will be an opportunity to
strengthen the Bank’s outreach, communicate more clearly its role
and priorities and further enhance BSTDB’s profile as a regional
development institution focused on economic development and
regional cooperation. The Baku meetings will also help reinforce
the Bank’s key strategic messages, including the importance of
supporting resilient growth, stronger regional linkages and a more
diversified economic base across member countries," BSTDB President
Dr. Serhat Köksal said in an exclusive interview with Trend ahead of the
Bank's Annual Meeting and Business forum in Baku.
The Bank's president noted that from an operational perspective,
BSTDB also expects the meetings to contribute to the further
development of its project pipeline in Azerbaijan and the wider
region.
"We see particular value in strengthening engagement with public
and private sector counterparts, identifying bankable opportunities
in priority sectors, and supporting projects that contribute to
diversification, private sector development, connectivity and
sustainable growth. In this sense, the meetings should serve not
only as a forum for strategic discussion, but also as a practical
outreach exercise that helps translate dialogue into concrete
financing opportunities over time," he said.
He went on to add that BSTDB currently has a strong pipeline of
projects in Azerbaijan across several priority sectors, including
financial institutions, manufacturing, agribusiness, transport,
energy and ICT.
"We are also actively working on selected public-private
partnership projects and expect to be able to announce some of them
in the near future, once the relevant processes are completed. As a
matter of principle, BSTDB announces new financing agreements,
credit lines or project approvals only once they have been formally
approved, signed where applicable and cleared for public
disclosure. Azerbaijan remains an important market for the Bank,
and we are committed to further expanding our activities in the
country in line with our mandate and the priorities of our
shareholders," Köksal said.
Cooperation in energy efficiency
He noted that the BSTDB is strongly committed to supporting
Azerbaijan’s sustainable development priorities, including its
green transition agenda.
"At present, the Bank is actively looking at opportunities in
the renewable energy sector and related areas where BSTDB financing
can add value. We are also in discussions on possible opportunities
to support Azerbaijan’s energy infrastructure, including areas such
as grid modernization and digitalization. These are important
priorities not only for Azerbaijan, but also for the wider region,
as countries work to improve the resilience, efficiency and
sustainability of their energy systems. Some of these discussions
are advancing, and we hope to share more information in due course,
once the relevant processes and approvals have been completed.,"
said Köksal.
Middle Corridor-related projects
BSTDB president noted that the Bank has a pipeline of
transport-sector opportunities that are closely aligned with
Azerbaijan’s efforts to strengthen its role as a major transport
and logistics hub between Europe and Asia.
"These opportunities are relevant not only to the Middle
Corridor, but also to wider regional connectivity, including the
North-South Corridor and the historic Silk Road routes. Given the
scale and complexity of such projects, they require close
coordination among several parties, including the Government,
sponsors, co-financiers and other stakeholders. BSTDB’s role is to
assess such opportunities carefully, taking into account their
development impact, financial viability, environmental and social
standards, and contribution to regional cooperation," noted
Köksal.
He added that the Bank will announce specific projects once the
Bank’s internal procedures have been completed and the necessary
approvals have been obtained.
New credit lines for SMEs
The BSTDB president pointed out that SME finance remains one of
Bank’s important areas of activity in Azerbaijan.
"The Bank provides credit lines through financial
intermediaries, allowing partner banks to on-lend funds to small
and medium-sized enterprises across the economy. These credit lines
are generally sector-neutral and can support SMEs in many areas,
including agriculture, manufacturing, processing, tourism, trade,
services, real estate and other sectors. The exact allocation
depends on market demand, eligible borrowers and the sector focus
of our partner banks," he said.
Köksal noted that the Bank relies on the local expertise,
regional presence, sales channels and client relationships of
commercial banks.
"So far, our partner banks in Azerbaijan have demonstrated a
strong ability to reach businesses across multiple sectors and
improve access to finance for SMEs," he added.
Expanding the list of Azerbaijani partner
banks
He noted that expanding and deepening cooperation with financial
institutions in Azerbaijan is a continuous part of BSTDB’s
work.
"The Bank is currently preparing a new facility with a new
partner bank in Azerbaijan. We expect to share more information
around the BSTDB Annual Meeting and Business Forum in Baku on 1 and
2 July, once the relevant arrangements are finalized. In addition,
we are in discussions with existing partner banks, as well as with
two further potential new partner banks, with a view to providing
new funding for trade finance and/or SME financing," Köksal
said.
Financial instruments in local currency
The BSTDB president noted that the Bank is considering several
ways to secure access to local currency funding or appropriate
hedging mechanisms.
"This is increasingly relevant as demand for local currency
financing is growing among both financial institutions and
corporate clients in Azerbaijan. Local currency financing can help
reduce foreign exchange risk for borrowers whose revenues are
mainly in local currency. Strengthening our capacity in this area
would allow BSTDB to provide more direct local currency financing
to customers, where market conditions and the Bank’s internal
requirements allow," he explained.
Köksal added that any new structure or instrument would need to
be commercially sound and consistent with BSTDB’s financial
policies and approval procedures.
Re-entering Azerbaijan's local currency
market
The BSTDB president noted that local currency issuance in member
states is a strategic priority for the Bank.
"It advances three objectives simultaneously: deepening domestic
capital markets, providing natural hedges where we lend in local
currency and demonstrating our commitment as a regional institution
to our member state economies. Our previous manat-denominated
transactions established BSTDB as one of very few supranational
issuers active in the Azerbaijani market, and the experience was
very positive both in terms of investor reception and execution.
Re-entering remains firmly on our agenda. We have been very active
in local currency markets across the region. Azerbaijan is one of
the markets where we are most actively in dialogue with potential
arrangers and investors and given our footprint in the country,
there is a clear strategic logic for return," he said.
Köksal noted that the exact timing depends, as always, on a
combination of market conditions, swap economics, and investor
appetite.
"But the macro backdrop is supportive: Azerbaijan delivered 7.5%
real GDP growth in 2025, runs a fiscal surplus, and has public debt
of just under 28% of GDP — a Baa3 sovereign with positive outlook
from Moody's. That is exactly the kind of environment where
local-currency MDB issuance can find strong domestic demand, and we
look forward to building on our prior presence in the manat
market," he explained.
