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$10.2 million EBRD loan helps develop Azeri real estate sector
Azerbaijan’s real estate sector has received a fresh boost with the help of a
$10.2 million loan from the EBRD to Neptune Ltd and Lybra Ltd, owners and
operators of Landmark I and II, two highly developed commercial office
buildings near the capital city of Baku’s historic centre. The financing will
help the companies reorganise their existing debt and obtain long-term
financing otherwise unavailable in Azerbaijan’s property sector.
George Krivicky, Director for Azerbaijan at the EBRD, said this project will
provide both companies with finance to operate much-needed office space in
Baku. Mr Krivicky added that the project is in line with the Bank’s strategy
to finance projects beyond the country’s oil and gas sector. The project is
also expected to demonstrate to local banks that companies in Azerbaijan with
strong management teams that are open to improving their corporate governance
and accounting standards to international standards should be considered for
longer-term financing.
Edgar Rosenmayr, Director of Property and Tourism team at the EBRD, said the
financing and security structure, including its long-term maturity, has set a
benchmark for real-estate financing in Azerbaijan. It should serve as a good
example for future projects in the sector, and accelerate the establishment
and development of a viable real estate market, he added.
The Landmark I and II buildings currently rent out office accommodation to
international tenants including AIG, Exxon Mobil, Connoco Phillips, Statoil,
and the US and the British embassies.
Bertrand Millot, Vice President, Portfolio Management at IFPT, a Canadian
investment fund which co-financed the project with $5.1 million, said: “This
project is a prime example of a well structured opportunity for private
lenders to participate in the economic growth of countries such as Azerbaijan.
It shows that forward thinking, quality oriented and transparent entrepreneurs
can attract the international funds they need to finance their developments.”
The EBRD has provided €350 million in financing for projects in Azerbaijan in
sectors as diverse as banking, property, power, water, transport, SMEs and
natural resources.
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