The new projects, which are being implemented in the liberated territories of Azerbaijan, can give a strong impetus to the development of the local debt market, Deputy Head of the Market Analysis Department of the Russian Gazprombank, Gulnara Haydarshina, said, Report informs.
“These projects are funded by both the state budget and private investors. At the same time, taking into account large-scale financial needs and the exhaustion of credit limits in banks, companies plan to attract funds for financing projects in the capital markets. An additional argument in favor of bond issuance for the local market is the lack of collateral,” she noted.
Thus, according to her, potential issuers are trying to improve the quality of their financial statements: “The need for financing infrastructure projects in the liberated territories is estimated at 3-4 billion manats (over $ billion) per year, which, according to our calculations, is about 2.2-3 percent of the GDP. This also creates the potential for deployment of “green financing” instruments.”
She said that work is currently underway to prepare platforms for investors in the secondary market: “Foreign investors can also invest in the securities of the Ministry of Finance in both the primary and secondary markets through brokers. Cooperation with “Euroclear” and “Clearstream” continues to remain on the agenda, but requires a further increase in the volume of the local debt market. The Ministry of Finance and the World Bank are working on a public debt risk management program that will provide mechanisms for the development of the secondary market of government securities with the participation of the largest banks in Azerbaijan. We think that the introduction of such a mechanism will contribute to a significant increase in the volume of the local debt market.”