BAKU, Azerbaijan, October 6. Azerbaijan needs
to strengthen the institutional framework and project preparation
capacity required to attract private investment into projects, Real
Hajiyev, Deputy Director and Senior Banker at the European Bank for
Reconstruction and Development (EBRD), said, Trend's correspondent
reports.
He made the remarks at the German-Azerbaijani Conference on
Strategic Partnership and Connectivity in Baku on Tuesday.
According to him, Azerbaijan has a sufficiently stable
regulatory environment and strong fiscal indicators. “I can say
that Azerbaijan has a very stable regulatory environment and the
government has a very strong fiscal balance. These components are
already in place. The key missing elements are the institutional
framework needed to incentivize and mobilize private investment
into projects, as well as the resources and fundamental components
required to prepare projects that meet the requirements of
international investors,” he said.
Hajiyev noted that it is important to expand the range of
contractual and financing models available for project
implementation. “Typically, certain types of EPC contracts are
preferred for projects in Azerbaijan. Particularly for large
projects, a single contract model is mainly used for project
execution and delivery. However, alternative approaches, including
public-private partnership (PPP) models, are also available.
Different approaches and models can be applied within PPP
frameworks to attract investors,” the EBRD official said.
He said the key issue is not only ensuring that projects are
technically sound, but also properly allocating risks among the
parties. “It is important for the projects themselves to be
fundamentally strong from a technical standpoint, while also
ensuring that risks are properly allocated among the parties,”
Hajiyev said.
Touching on the EBRD's role in this process, he said the bank
provides institutional-level support to governments to address
existing gaps and develop alternative mechanisms for preparing and
implementing projects. “We help governments at the institutional
level address these gaps, provide the necessary expertise, and
develop alternative ways to identify, prepare and implement
projects,” he added.
According to Hajiyev, the EBRD also supports the preparation of
investment projects through technical assistance funds and the
bank's internal resources. “We want to make sure that once projects
are ready, private investors, lenders and equity investors are also
prepared to invest in them,” the EBRD official said.
