BAKU (Reuters) - The European Bank for Reconstruction and Development is considering participation in the planned privatization of International Bank of Azerbaijan (IBA), the EBRD’s manager in the South Caucasus country said.
The EBRD sees Azerbaijan returning to economic growth, with GDP up 2 percent, and single-digit inflation this year, EBRD country manager Ivana Fernandes Duarte said.
IBA last year proposed a plan to restructure $3.3 billion of its debt and said in July it had approval from creditors accounting for 93.9 percent of that debt.
The EBRD is in contact with IBA and the Azeri authorities to discuss privatization options, Fernandes Duarte told Reuters in an interview.
“We will definitely consider this once it’s ready for privatization,” she said, but declined to elaborate on the possible format or timing of the sale.
“It remains to be seen ... whether we are talking about a sale to a strategic investor that we could support as a financial investor or another type of entry of private capital,” Fernandes Duarte said.
The EBRD usually acquires minority stakes in a range between 5 and 25 percent, she added.
Fernandes Duarte said the Azeri economy was showing signs of recovery and looked set to grow by 2 percent this year, after contracting by 0.2-0.3 percent last year.
According to Azerbaijan’s own estimates, gross domestic product increased 0.1 percent in 2017, the state statistics committee said in January, missing a government forecast of 1 percent due to falling oil production.
Fernandes Duarte said the EBRD expected annual inflation to decline to a range of 5-9 percent this year from double digits in 2017.
“It should be single-digit definitely,” she said.
Inflation in January-November 2017 was 13.4 percent.
Fernandes Duarte said Azerbaijan was making progress in its drive to reduce dependency on oil and gas, which account for about 70 percent of state revenues, and to improve the business environment.
“In our meetings, we see a commitment from the authorities that they are interested in diversification,” she said.
“They are trying to create conditions for small companies to develop, to grow and be active in other (non-oil) sectors.”
Editing by Robin Pomeroy
Our Standards: The Thomson Reuters Trust Principles.