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IFC and Partners Launch Program to Help Local Businesses Benefit From Large Pipeline Project


Corrie Shanahan
Phone:  (202) 473 2258

Fax:  (202) 974-4384

E-mail:
 cshanahan@ifc.org

Elika Trifonova        

Phone:  (202) 458 8357        

Fax:  (202) 974-4384        

E-mail:
 Etrifonova@ifc.org


Baku, February 12, 2003—The International Finance Corporation, the private sector arm of the World Bank Group, has partnered with BP, Statoil, GTZ (the German agency for technical assistance), and the Baku Enterprise Center to launch a program to help local businesses benefit from investments in the oil industry, including the Baku-Tbilisi-Ceyhan pipeline. IFC is contributing $250,000 to the program.

The program is part of IFC’s strategy of working closely with its clients and partners to provide developmental support to major projects. This support is directed at expanding the local supply and distribution chains to create more opportunities for smaller businesses and to assist in sustainable community development efforts.


The program which is linked to IFC’s proposed investments in both the Azeri, Chirag, and Deepwater Gunashli oilfield and the Baku-Tbilisi-Ceyhan pipeline projects, is being launched initially in Azerbaijan and will be expanded to Georgia and Turkey.


The objective of the program is to better equip Azeri businesses to participate in business opportunities related to, but not exclusively, the on-going oilfield developments. The program focuses on helping companies overcome obstacles preventing them from winning contracts related to the projects. The program centers on three principal areas:

  • Technical assistance to targeted Azeri service and supply companies
  • The development of local consultancy capacity in the provision of business services
  • The development of new financial products aimed at improving access to capital for small and medium enterprises (SMEs) in Azerbaijan

Up to 30 local companies will take part in the program and will come from subsectors that the project team has already identified as providing long-term opportunities when the oilfield projects come on stream.


Each company will undergo a “diagnostic” review to establish what sort of technical assistance is needed. The assistance will then be tailored to their needs and provided over a period of one year, addressing issues such as business planning, assistance with access to capital, management training, and the attainment of standards required by the international business community based in Baku.


Also included in the linkage program will be the generation of an “SME map”, which will describe the business environment in which local companies operate, including access to enterprise support services and finance.


All of the partners in the program — BP, Statoil, GTZ, and the Baku Enterprise Center—are providing funds in kind and in cash. GTZ will be responsible for delivery of the program providing expertise to work with local companies. The Baku Enterprise Center will provide data on the industry as well as individual expertise. A full-time SME coordinator will manage the program on behalf of the partners.


“We are delighted that the IFC linkage initiative is now underway in Baku with the first of its four-point program,” said Mr. Harold Rosen, director of the SME Department at IFC. “The key strength of this program is the partnership between IFC and BP, Statoil, GTZ, and the Enterprise Center—all providing money, time, and knowledge towards the success of the initiative. This will help ensure that the assistance is market-focused with all players bringing expertise to the table.”


“It is also pleasing to have GTZ involved, providing funds and expertise, in addition to its international experience in the delivery of these types of programs,” Mr Rosen added.


IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.  Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries.  IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.


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