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.
