Washington, 1 August 1997 (RFE/RL) - Azerbaijan and the U.S. Export-Import (Exim) Bank have signed a project incentive agreement which lays the foundation for possible financing of American exports to Baku.
Azerbaijani President Heidar Aliyev, who is in Washington on an official visit, witnessed the signing by his Finance Minister Fikret Yusifov and National Bank chairman Elman Rustmov. Exim Bank President James Harmon signed for the independent U.S. export financing agency.
Harmon said the agreement would enable Azerbaijan to obtain capital goods to develop infrastructure and industry, "in particular to develop its enormous oil reserves."
The agreement provides a framework for financing U.S. exports to Azerbaijan where repayment is based on export revenues generated by the borrower rather than a sovereign guarantee of the debt by the Baku government. The export revenues are put into an off-shore bank which then makes loan repayments.
Exim Bank officials say that Azerbaijan's progress in implementing economic reforms allowed the signing of the pact. The U.S. is especially eager to have financing available for the consortium of western oil companies which are developing the oil reserves and plan to build two pipelines for oil exports.