IFC and Swiss Government Launch Second Phase of Azerbaijan Corporate Governance Project

Baku, Azerbaijan, June 2008—IFC, a member of the World Bank Group, has partnered with the Swiss Confederation’s State Secretariat for Economic Affairs (SECO) to launch the second phase of the Azerbaijan Corporate Governance Project. IFC will work with companies and banks to further improve their corporate governance practices and minimize their portfolio risk. IFC will also work with educational institutions to strengthen corporate governance training and with the government to improve the regulatory environment. A public education campaign will help increase awareness and enhance the media’s capacity to cover the topic.

The first phase of the project achieved considerable results:
-Two ministerial decrees for improving corporate governance and investor protection were issued.
-A multiagency taskforce to help improve the legislative framework for corporate governance was established by the government.
-An external audit regulation for commercial banks was drafted by IFC and adopted by the National Bank of Azerbaijan.
-Clients attracted $17.9 million in investment by improving their practices.

“Our cooperation with IFC has been very fruitful. Several joint events, as well as support for translating the OECD Guidelines on Corporate Governance for State-owned Enterprises, are examples of such cooperation. It is indeed good news that IFC is helping launch the project’s second phase, because it will be of great value to us. We look forward to a long-term partnership,” said Sanan Tapdigov, Director of Corporate Governance Division at Azerbaijan’s Ministry of Economic Development.

“For SECO, partnering with IFC to finance projects like this means helping improve the country’s investment climate. Sound corporate governance practices foster private sector and capital markets development, helping reduce poverty. This is our main strategic objective. Phase one was so successful that we are excited about phase two,” said Nailya Safarova, National Program Officer, Swiss Cooperation Office for the South Caucasus at the Embassy of Switzerland.

“The demand to improve corporate governance practices in Azerbaijan is increasing rapidly, as demonstrated by the establishment of a multiagency taskforce. IFC will help Azerbaijani companies attract more investment and contribute to developing the private sector, which is an important part of IFC’s strategy. Phase two will build on the achievements so far and include new tasks that will help improve corporate governance systems and practices,” said Caroline Bright, IFC Project Manager.

The three-year project builds on IFC’s expertise in Central Asia, Eastern Europe, and the Caucusus. It is funded by SECO.