TBILISI, Georgia, May 2. International financial institutions are given preference in financing the development of the Middle Corridor, Azerbaijani Finance Minister Samir Sharifov told reporters on the sidelines of the 57th ADB Annual Meeting in Tbilisi, TurkicWorld reports.
"The extent of private sector engagement in Middle Corridor development hinges greatly on the scale of the anticipated projects. Currently, the focus lies predominantly on infrastructure endeavors, particularly the construction of railways and road networks. Thus, it constitutes a significant investment in physical infrastructure," he said.
Sharifov noted that the private sector finances such projects, but they require rather large sums of capital.
"The repayment terms for this funding should be sufficiently long. Therefore, private financing under these circumstances appears relatively costly. As a result, priority is given to alternative financing sources, primarily international financial institutions such as the World Bank, the Asian Development Bank, the European Development Bank, and the Asian Infrastructure Investment Bank, as well as various development funds in several Arab countries, among others. These financial institutions offer longer loan durations and lower interest rates, which is crucial for small-scale projects, as ultimately, the loans must be repaid," he explained.
The minister remarked that securing loans may not pose significant challenges.
"But to repay, there must be a targeted long-term strategy," he added.
