BAKU, Azerbaijan, September 25. The UK's Export Finance Agency (UKEF) has the capacity to assume risk amounting to 5 billion pound sterling for projects in Azerbaijan, Co-Head of Global Business Origination at UKEF, Natalia Sergeeva, said during the 2nd Azerbaijan International Investment Forum held in Baku today, Trend's correspondent reports from the event.
According to her, a number of promising projects fail to materialize not due to a lack of potential or ambition, but because of limited access to long-term financing.
"UKEF can help address this issue. Our global portfolio currently stands at approximately 60 billion pound sterling. Regarding Azerbaijan, we have the capacity to underwrite risks amounting to 5 billion pound sterling, that is, the capital is available for use," Sergeeva explained.
She noted that the financing provided by UKEF is long-term in nature, which is particularly important for infrastructure projects.
"On average, we can offer financing terms of up to 15 years for projects. For clean energy and other green projects, this period can extend up to 22 years. This is a crucial factor for investors, especially when they are concluding contracts with EPC contractors or agreements for the procurement of goods," she emphasized.
Sergeeva mentioned that one of UKEF's key products is guarantees, and the agency can cover up to 85 percent of the contract value.
"Our guarantee is flexible regarding requirements for UK content. Our core product is the guarantee itself, and we cover 85% of the contract value. We underwrite 100% of the risk associated with that 85% portion. This is particularly significant for large-scale projects and impacts their economic viability," the UKEF representative noted.
According to her, UKEF collaborates with banks, and the UK government's AA credit rating plays a crucial role in the assessment of financing.
"Banks determine the cost of capital based on the UK government's credit rating—the 'AA' rating. Consequently, the economic terms of financing backed by UKEF are quite attractive," Sergeeva said.
She added that UKEF could also support the expansion of cooperation opportunities across various sectors in Azerbaijan.
"We can help establish connections with organizations in the UK that have access to various industries and entities. We work with business and trade, innovation, science, and commercial structures. We also have established long-term supply chains across various industrial sectors," she noted.
According to Sergeeva, as Azerbaijan plans to diversify its economy across various sectors, UKEF can provide support during the initial stages of this process.
"As Azerbaijan considers diversifying its scope of activity across sectors, we can assist in this regard, starting from the initial discussions," she stressed.
The UKEF representative said that cooperation with international banks, other export credit agencies, and international financial institutions enables the mobilization of additional capital.
"UKEF’s collaboration with international banks, provision of expertise, and engagement of other export credit agencies and international financial institutions help create opportunities and mobilize additional capital. Capital markets are also a vital tool, and for Azerbaijani projects and companies, this is one of the options on the table," noted Sergeeva.
She spoke positively of Azerbaijan's economic indicators and its portfolio of projects across various sectors.
"We see that Azerbaijan’s fundamental indicators are strong and that a portfolio of ambitious projects is taking shape across various industrial sectors. UKEF’s primary goal is to ensure that no project fails due to a lack of access to financing," added Sergeeva.
