BSTDB expects Baku meetings to boost its project pipeline.
"The Black Sea Trade and Development Bank (BSTDB) expects the upcoming Annual Meeting and Business Forum in Baku to provide an important platform for strategic dialogue with shareholders, authorities, business representatives and other partners. Beyond the formal discussions, the meetings will be an opportunity to strengthen the Bank’s outreach, communicate more clearly its role and priorities and further enhance BSTDB’s profile as a regional development institution focused on economic development and regional cooperation. The Baku meetings will also help reinforce the Bank’s key strategic messages, including the importance of supporting resilient growth, stronger regional linkages and a more diversified economic base across member countries," BSTDB President Dr. Serhat Köksal said in an exclusive interview with Trend ahead of the Bank's Annual Meeting and Business forum in Baku.
The Bank's president noted that from an operational perspective, BSTDB also expects the meetings to contribute to the further development of its project pipeline in Azerbaijan and the wider region.
"We see particular value in strengthening engagement with public and private sector counterparts, identifying bankable opportunities in priority sectors, and supporting projects that contribute to diversification, private sector development, connectivity and sustainable growth. In this sense, the meetings should serve not only as a forum for strategic discussion, but also as a practical outreach exercise that helps translate dialogue into concrete financing opportunities over time," he said.
He went on to add that BSTDB currently has a strong pipeline of projects in Azerbaijan across several priority sectors, including financial institutions, manufacturing, agribusiness, transport, energy and ICT.
"We are also actively working on selected public-private partnership projects and expect to be able to announce some of them in the near future, once the relevant processes are completed. As a matter of principle, BSTDB announces new financing agreements, credit lines or project approvals only once they have been formally approved, signed where applicable and cleared for public disclosure. Azerbaijan remains an important market for the Bank, and we are committed to further expanding our activities in the country in line with our mandate and the priorities of our shareholders," Köksal said.
Cooperation in energy efficiency
He noted that the BSTDB is strongly committed to supporting Azerbaijan’s sustainable development priorities, including its green transition agenda.
"At present, the Bank is actively looking at opportunities in the renewable energy sector and related areas where BSTDB financing can add value. We are also in discussions on possible opportunities to support Azerbaijan’s energy infrastructure, including areas such as grid modernization and digitalization. These are important priorities not only for Azerbaijan, but also for the wider region, as countries work to improve the resilience, efficiency and sustainability of their energy systems. Some of these discussions are advancing, and we hope to share more information in due course, once the relevant processes and approvals have been completed.," said Köksal.
Middle Corridor-related projects
BSTDB president noted that the Bank has a pipeline of transport-sector opportunities that are closely aligned with Azerbaijan’s efforts to strengthen its role as a major transport and logistics hub between Europe and Asia.
"These opportunities are relevant not only to the Middle Corridor, but also to wider regional connectivity, including the North-South Corridor and the historic Silk Road routes. Given the scale and complexity of such projects, they require close coordination among several parties, including the Government, sponsors, co-financiers and other stakeholders. BSTDB’s role is to assess such opportunities carefully, taking into account their development impact, financial viability, environmental and social standards, and contribution to regional cooperation," noted Köksal.
He added that the Bank will announce specific projects once the Bank’s internal procedures have been completed and the necessary approvals have been obtained.
New credit lines for SMEs
The BSTDB president pointed out that SME finance remains one of Bank’s important areas of activity in Azerbaijan.
"The Bank provides credit lines through financial intermediaries, allowing partner banks to on-lend funds to small and medium-sized enterprises across the economy. These credit lines are generally sector-neutral and can support SMEs in many areas, including agriculture, manufacturing, processing, tourism, trade, services, real estate and other sectors. The exact allocation depends on market demand, eligible borrowers and the sector focus of our partner banks," he said.
Köksal noted that the Bank relies on the local expertise, regional presence, sales channels and client relationships of commercial banks.
"So far, our partner banks in Azerbaijan have demonstrated a strong ability to reach businesses across multiple sectors and improve access to finance for SMEs," he added.
Expanding the list of Azerbaijani partner banks
He noted that expanding and deepening cooperation with financial institutions in Azerbaijan is a continuous part of BSTDB’s work.
"The Bank is currently preparing a new facility with a new partner bank in Azerbaijan. We expect to share more information around the BSTDB Annual Meeting and Business Forum in Baku on 1 and 2 July, once the relevant arrangements are finalized. In addition, we are in discussions with existing partner banks, as well as with two further potential new partner banks, with a view to providing new funding for trade finance and/or SME financing," Köksal said.
Financial instruments in local currency
The BSTDB president noted that the Bank is considering several ways to secure access to local currency funding or appropriate hedging mechanisms.
"This is increasingly relevant as demand for local currency financing is growing among both financial institutions and corporate clients in Azerbaijan. Local currency financing can help reduce foreign exchange risk for borrowers whose revenues are mainly in local currency. Strengthening our capacity in this area would allow BSTDB to provide more direct local currency financing to customers, where market conditions and the Bank’s internal requirements allow," he explained.
Köksal added that any new structure or instrument would need to be commercially sound and consistent with BSTDB’s financial policies and approval procedures.
Re-entering Azerbaijan's local currency market
The BSTDB president noted that local currency issuance in member states is a strategic priority for the Bank.
"It advances three objectives simultaneously: deepening domestic capital markets, providing natural hedges where we lend in local currency and demonstrating our commitment as a regional institution to our member state economies. Our previous manat-denominated transactions established BSTDB as one of very few supranational issuers active in the Azerbaijani market, and the experience was very positive both in terms of investor reception and execution. Re-entering remains firmly on our agenda. We have been very active in local currency markets across the region. Azerbaijan is one of the markets where we are most actively in dialogue with potential arrangers and investors and given our footprint in the country, there is a clear strategic logic for return," he said.
Köksal noted that the exact timing depends, as always, on a combination of market conditions, swap economics, and investor appetite.
"But the macro backdrop is supportive: Azerbaijan delivered 7.5% real GDP growth in 2025, runs a fiscal surplus, and has public debt of just under 28% of GDP — a Baa3 sovereign with positive outlook from Moody's. That is exactly the kind of environment where local-currency MDB issuance can find strong domestic demand, and we look forward to building on our prior presence in the manat market," he explained.
