Regional revitalization and the development of new energy sources are also creating opportunities for smaller businesses to serve as subcontractors
Azerbaijan is one of the markets where Slovak companies have established a solid track record. Their experience with infrastructure and water management projects has enabled them to expand into the energy and transportation sectors as well. Regional reconstruction and the development of renewable energy sources are creating new opportunities. Eximbanka can assist exporters not only with financing but also with risk mitigation.
Established Positions
Exporters have made a name for themselves in Azerbaijan, particularly in the construction industry, and have gradually expanded their activities into other sectors. According to Mária Líšková from Eximbanka’s International Relations Department, their advantage lies in a combination of experience and financial support. “Thanks to their long-standing track record, particularly in infrastructure and water management projects, Slovak companies have also established a strong presence in the energy and transportation sectors. The main reason for their success is a combination of technical know-how that meets European standards, a long-term presence in the market, and the ability to rely on financing and risk insurance from Eximbanka.” Supported export activities include infrastructure reconstruction and the supply of specialized equipment for the international airport in Baku. Eximbanka collaborated on the project by providing guarantees alongside its Czech partners from the EGAP agency. In 2011, Global Trade Review magazine named it the best deal of 2010.
Other Industries
These new opportunities build on areas where companies have already established expertise. Slovakia became the first European Union country to win a direct government contract for the comprehensive construction of a smart village in Azerbaijan. The project has the potential to lead to further contracts as part of the ongoing regional reconstruction program. In the energy sector, opportunities are emerging for capacity building in the field of renewable energy sources. Azerbaijan plans to connect ten new solar and wind power plants to the grid by 2027. The defense industry also represents promising growth potential, with new contracts and memoranda of cooperation having been signed.
Investment Projects
Eximbanka will support Slovak investments or joint ventures. Clients can use a loan for investments abroad or combine it with other instruments from its product portfolio. “We evaluate each project based on its parameters, including the economic viability of the investment and its ability to generate the planned revenues necessary for proper debt service,” explains Tomáš Kuruc, director of the Structured Finance Department. For small and medium-sized enterprises, large public tenders, differing technical standards, and certification procedures pose a greater challenge than entering the market itself. As Matúš Šársky, director of the International Relations Department, notes, the key obstacle lies more in navigating large public tenders and the differences in technical standards and certification procedures.
Export Financing
Eximbanka offers exporters a combination of financial, guarantee, and insurance instruments. Pre-export financing can cover costs associated with fulfilling an order. Bank guarantees help secure and fulfill contracts, and the issuance of a documentary letter of credit contributes to more secure payment terms. Export receivables insurance can cover selected commercial and political risks associated with non-payment by a foreign buyer. Eximbanka’s Non-Marketable Risk Department oversees several projects focused on infrastructure development. In these projects, the bank acted as a reinsurer, providing coverage for a Slovak export contract. “We are currently preparing buyer credit insurance worth several tens of millions of euros for a forest park construction project. The financing bank has already received the preliminary insurance terms from us. In the future, we also plan to participate in projects involving the construction of urban complexes in Azerbaijan,” adds Milan Horváth from the Non-Marketable Risk Insurance Department.
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Source: TREND.sk