Azerbaijan, Baku, Feb. 22 / Trend I.Khalilova, A.Taghiyeva /
Azerbaijan is preparing to buy up to a three per cent sharein the Bank of Development and Trade of the Economic Cooperation Organizstion (ECO) - ECOBANK, the country's government told Trend on Wednesday.
"The government has formally applied to the Bank with the proposal, but the share of Azerbaijan's share in the bank's capital may depend on the distribution of participations in connection with Afghanistan joining ECOBANK, about which there is already agreement in principle", the government source said.
For Azerbaijan to pay its share in the bank's capital plans, it needs to allocate 9.7 million SDR (exchange rate is 1,545950 USD / SDR on February 21). The country's state budget allocated 2.5 million manat ($3.2 about million) to pay for this stake.
"We would like Azerbaijan to become an ECOBANK shareholder with more share capital and offered a package at 10 to12 per cent," deputy director for External Relations at ECOBANK Tuncay Melektosun told Trend on Wednesday. He said the bank expected the membership of 10 countries.
"Today, the official appeals to the bank to join the shareholders that came from Azerbaijan and Afghanistan," Mr Melektosun said, adding that the entry of Afghanistan will not affect Azerbaijan's equity participation.
The Bank for Development and Trade of the Economic Cooperation Organisation with an authorised capital of 300 million SDR (about $458.73 million) and an announced capital of one billion SDR (about $1.529 billion) was founded by Iran, Pakistan and Turkey in 2005. The bank's headquarters is in Istanbul. One ECO-unit corresponds to one SDR.
According to the document, regulating rules of admission of new members to the bank and the share of each new member must not exceed 15 per cent and shouldn't be less than 0.34 per cent.
"With the inclusion of new members to the shareholders of the bank, authorised capital will be increased from the current 300 million ECO-units ($463.8 million) to 580 million ECO-units (over $896.65 million)," Mr Melektosun said earlier.
The minimum fee for the stake is two million ECO-units ($3.09 million), which is 0.34 per cent of the total capital, while the maximum allowable contribution for the purchase of 15 per cent will be 87 million ECO-units (over $134.5 million).
In this case he said, the three bank's founders - Iran, Pakistan and Turkey - will have equal shares of 17.24 per cent, or 100 million ECO-units (about $154.595 million), so that their total volume of shares form the majority.
"With a 15 per cent equity participation the country has the right to appoint a representative to the board of directors. Participants having a share of less than 15 per cent may nominate a common representative," Mr Melektosun said earlier.
The member countries of ECO Bank are represented by the Central Banks or the relevant ministries.
Organisation for Economic Cooperation was founded by Iran, Pakistan and Turkey in 1985. In 1993 the organisation was granted observer status at the UN, and a year later at the Organisation of the Islamic conference.
A summit of the organisation, whose members are Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Uzbekistan, Tajikistan, Turkey and Turkmenistan was held in May 2006 in Baku and the X Summit in 2009 in Tehran.