"Azerbaijan provides low-interest loans to its allies."
This was stated by MP Aydin Mirzazade in an interview with the Yeni Musavat newspaper.
Fakt Yoxla examined whether the MP's statement was true.
Over the past 10 years, Azerbaijan has provided loans to four countries under various projects.
Only interest rates of two of them have been announced. First of all, about loans with unknown interest rates.
Azerbaijan has allocated a $ 500 million loan to Iran in 2018. The Deputy Minister of Roads and Urban Development of Iran, Ali Nurzad, claims that the loan was issued at a low-interest rate of about 2.5 percent. However, there is no confirmed information in this regard.
Another country with an unknown interest rate is Belarus. In 2010, Azerbaijan provided Belarus with a 12-day $ 200 million loan to pay off its debt to Russia's Gazprom company.
Belarus has repaid its debt before the deadline. Belarusian Ambassador to Azerbaijan, Patskevich, said the loan was accidental and that his country was repaying it early.
In 2011, Azerbaijan provided the Belaruskaliy OJSC with a loan of $ 300 million. The loan was guaranteed by Belarus. The term and interest rate of the loan were not disclosed.
The two countries with known interest rates are Georgia and Serbia.
Within the framework of the Baku-Tbilisi-Kars railway project, in 2011, Azerbaijan provided Georgia with a $ 200 million loan for 25 years with the possibility of extension at 1% per annum on Tranche A and a $ 575 million loan for 25 years with the possibility of extension at 5% per annum on Tranche B. In total, the neighboring country received a loan of $ 775 million.
In 2012, Azerbaijan provided a loan of € 300 million to Serbia for road construction. The loan is provided at 4% per annum for 15 years.
In 2012, about half of SOCAR's $ 2.6 billion foreign debt was in the range of 5-6% per annum, and the other half was in the range of 2.5-5% per annum. This can be found in SOCAR's financial report for 2012 (p. 49)
For example, two tranches of these loans worth $ 500 million were taken at LIBOR + 4.88%. LIBOR is an interest rate in the London Interbank Money Market and is used for short-term borrowings in international debt markets. In 2012, the annual rate of LIBOR was 1.130%.
This means that SOCAR's annual interest rate on the two tranches of loans mentioned above is around 6%, which is higher than the loans provided by Azerbaijan to both Georgia and Serbia.
Fakt Yoxla concludes that Aydin Mirzazade's statement is Mostly True.
