Tag Archives: IFI

IMF praises Georgia

DEC. 20 (The Conway Bulletin) – The IMF handed another $41.6m loan over to Georgia, the fourth tranche of a three-year deal worth a total of $291.5m, after praising its economic performance and prudence. The IMF said that Georgia’s economic trajectory was positive although there were external risks and reserves needed to be built up. Georgia has become something of a favourite in the region for Western donors, recovering strongly from a 2014-16 economic downturn.

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>>This story was first published in issue 395 of The Conway Bulletin on Dec. 23 2018

World Bank gives Uzbekistan loan to improve life in cities

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DEC. 19 (The Conway Bulletin) – The World Bank approved a $100m loan to Uzbekistan specifically to improve life in the cities of Kagan, Chartuk and Yangiyule, media reported. This is the first urban development programme approved by the World Bank. It said that 40% of the country’s urban population lives in medium-sized cities that have often fallen into disrepair.

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>>This story was first published in issue 395 of The Conway Bulletin on Dec. 23 2018

Former Georgian PM takes EBRD job

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SEPT. 26 (The Conway Bulletin) – Former Georgian PM Giorgi Kvirikashvili took a job as an adviser at the European Bank for Reconstruction and Development (EBRD). In an interview with media he said that one of his main functions would be to take his experience of setting up dialogue forums between the EBRD and Georgia to Uzbekistan. Mr Kvirikashvili had been Georgian PM from December 2015 to June 2018.
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>>This story was published in issue 387 of The Conway Bulletin on Oct. 1 2018

Azerbaijan closes EBRD-owned bank

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DEC. 23 (The Conway Bulletin) — Azerbaijan’s financial watchdog declared DemirBank, a mid-sized lender part-owned by the EBRD and the Dutch development fund FMO, unfit to trade after bad debt swamped it and its capitalisation ratio level dropped.

Azerbaijan’s banking sector has been flooded with bad debt since a 2014 fall in the price of oil triggered a currency devaluation and a recession. In 2017 its biggest bank, International Bank of Azerbaijan, defaulted on its debt.

The failure of Demirbank shows that part-ownership of a bank by major financial institutions doesn’t guarantee survival. The EBRD owned a 25% stake in Demirbank, and had been considering an increase, and FMO owned a 10% stake.

In March, Fitch, the rating agency, had warned that smaller Azerbaijani banks were vulnerable because of a surge in non-performing loans. It said that the proportion of non-performing loans on banks’ debt books had reached 21% up from 12% in 2015.

Demirbank’s licence to trade was withdrawn on Dec. 23 by Azerbaijan’s Financial Markets Supervision Chamber, a decision upheld by an appeal court four days later.

People who had deposits at the bank will be eligible for compensation from a state fund.
Demirbank had deposits of just over 100m manat ($59m) from 55,000 depositors.

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— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

EBRD is interested in buying a stake in International Bank of Azerbaijan, says Azerbaijan

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BAKU/SEPT. 19 (The Bulletin) — Azerbaijani media said that The European Bank for Reconstruction and Development (EBRD) was potentially interested in buying a stake in its largest bank, the International Bank of Azerbaijan (IBA).

Suma Chakrabarti, the EBRD’s president, was in Baku earlier in the month, although he doggedly denied the EBRD’s interest in IBA.

“I was there last week, we spoke to Azerbaijani President Ilham Aliyev, we said we would be happy to help in restructuring and refocusing of this bank,” he was quoted as saying.

The speculation has been triggered by comments from senior government officials who said that they wanted to sell off chunks of IBA, which restructured $3.3b of debt earlier this year, in 2018.

Azerbaijan’s government effectively bailed out IBA this year by increasing its stake in the bank, which dominates the Azerbaijani banking market, to 76.7% from 55%. Azerbaijan’s economy has been particularly badly hit by a fall in the price of oil since mid-2014 and has fallen into a recession.

Bad loans at banks have also multiplied and in May, Moody’s the ratings agency, said that the government had spent 18% of its GDP on propping up its banking sector.

The EBRD has a history of intervening in the financial sector in Central Asia and the South Caucasus. Earlier this year it agreed to increase its stake in Azerbaijan’s Unibank to help it stave off bankruptcy.

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— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

EBRD extends financing in Armenia

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SEPT. 5 2017 (The Conway Bulletin) — On a trip to Armenia, the European Bank for Reconstruction and Development (EBRD) said it was extending its scheme aimed at boosting lending to women and small and medium-sized businesses. It will lend Araratbank, one of the larger banks in the country, the equivalent of $10m in local dram currency, media reported.

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(News report from Issue No. 342, published on Sept. 7 2017)

EBRD eyes up Tajik Bank

OCT. 15 2016 (The Conway Bulletin) – Neil McKain, regional director of the EBRD, said that the Bank is ready to put $100m into the ailing Tojiksodirotbank (TSB), which has been under temporary administration since May. Rumours about the EBRD buying a stake in TSB have lingered for months. Should the investment be confirmed, it would be lower than the $165m previously rumoured. TSB is Tajikistan’s second-largest lender.

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(News report from Issue No. 301, published on Oct. 21 2016)

EBRD gives loans to Tajik farmers

OCT. 18 2016 (The Conway Bulletin) – The EBRD and the EU will partner to implement a 42m euro ($46.5m) programme to support farming in Tajikistan. A first tranche of 15m euros was provided to Arvand, a microfinance organisation, to make available to small agri- business borrowers. The EBRD, which is contributing 20m euros to the project, said that another development bank will soon join the project. Despite being the largest employer, the agricultural sector in Tajikistan is lacking investment and planning.

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(News report from Issue No. 301, published on Oct. 21 2016)

Turkmenistan signs $700m loan deal for TAPI with IDB

OCT. 14 2016 (The Conway Bulletin) – Turkmenistan and the Islamic Development Bank (IDB) signed a $700m loan deal for the construction of the so-called TAPI gas pipeline that will pump Turkmen gas to India via Afghanistan and Pakistan.

This is an important deal, not just because of its size, but also because it brings a second major international institution into the project. Turkmenistan has been powering the project, kicking off construction in December, but, up until now, Western companies and financial institutions, other than the Manila- based Asian Development Bank, have steered away from joining it.

Now, though, after months of negotiations, the normally publicity shy Turkmen Bank for Foreign Economic Activities met up with the IDB in Washington DC to agree the loan.

Through its official news website, Turkmenistan lauded the deal.

“The construction of the transnational gas pipeline will ensure the long-term supply of energy in the countries of Southeast Asia and will ensure further economic development in the region,” it said.

For months, Turkmenistan has negotiated with IDB and other international financial institutions for loans and grants. The Asian Development Bank, adviser to the project, agreed a $200m loan in April, when it also said the project was ‘doable’.

Others have been less impressed, calling the project, literally, a pipe- dream that couldn’t be done.

And it is certainly a challenge. The plan is to build a 1,800km pipeline from Turkmenistan across Afghanistan to Pakistan and India. The cost of the pipeline is estimated at $10b.

The IDB, which is headquartered in Jeddah, has not commented on the $700m loan for TAPI.

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(News report from Issue No. 301, published on Oct. 21 2016)

EBRD gives loan to Turkmenistan

OCT. 17 2016 (The Conway Bulletin) – The EBRD lent $850,000 to Gul Zaman, Turkmenistan’s largest events and catering company, to expand its business and create a premium industrial-scale bakery. The EBRD said that the EU will also provide grants and training for the project. Last month, the EBRD gave a $2.8m loan to a Turkmen brewer to build a potato crisp plant.

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(News report from Issue No. 301, published on Oct. 21 2016)