1. 1 AZERBAIJAN: EXPERIENCE ON EQUITY INVESTMENTS, TRADE FINANCE, AND SME LENDING

2. 2 PRESENTATION OVERVIEW  EQUITY INVESTMENTS  BRIEF PROJECT OVERVIEW  SME / TRADE FINANCE LENDING

3. 3 PSCEP OVERVIEW Funding:US$6.6 mm Time Frame:October 2008 – September 2011 Purpose:Enhance the competitiveness of key economic sectors through sustainable investments and provision of technical services Approach:Value chain, focusing on ten subsectors of the non-oil economy, including agro-industry, packaging materials, cold chain, ICT, light manufacturing. Building associative enterprises Access to Finance:Major component with aggressive targets: $50 million in first year

4. 4 Equity Investments Demand up significantly due to Soviet-era depreciated investments, financial crisis Key strategic relationships with government and quasi-government investment funds Azerbaijan Investment Company (AIC) Caspian International Investment Company (CIIC) Azerbaijan – Kuwait Investment Fund (AKIF) Working on ICT related GDAs and Cold Chain and logistics joint ventures Partnerships with AIC, CIIC, and AKIF one of great timing, synergies

5. 5 Equity Investments Providing assistance on: sector selection, analysis deal flow (regional investment road shows) company assessments / due diligence transaction structure Currently reviewing 6 transactions requiring investments exceeding $40 million Partnerships with AIC, CIIC, and AKIF one of great timing, synergies

6. 6 Trade Finance / SME Lending Selected six “middle market” banks to initiate programs building on ongoing but soon ending USAID financial sector project strong management interest in participating, existing SME lending programs signed MOUs with commitment to allocate $6 million dollars each in trade finance products Introduction of “new” trade finance products purchase order financing inventory financing leasing Banks appear to have liquidity to lend; moving away from entirely collateral based lending key challenge through crisis