EBRD supports green expansion of an agricultural producer in Azerbaijan

• US$ 2 million senior secured loan to double the land size, purchase green technology
• Investment to boost production and exports, reducing the use of land, water and fertilisers
• EU and Türkiye to provide technical and grant support

The European Bank for Reconstruction and Development (EBRD) is supporting the agribusiness sector of Azerbaijan by investing in green expansion of agricultural producer H&M Agro. A senior secured loan of US$ 2 million equivalent in local currency will help the company expand its existing hydroponic greenhouses.  

Funds will be used to purchase new land and to install efficient and environmentally friendly greenhouses in Salyan city. Once installed, new greenhouses will help H&M Agro achieve higher yields, while helping the company to protect the environment through efficient use of land, water and fertilisers. This will boost the producer’s competitiveness, enabling it to diversify its customer base internationally.  

The EU will complement the loan with grant support of up to €260,000 through EBRD’s Finance and Technology Transfer Centre for Climate Change (FINTECC),  while Turkiye will support the company in Azerbaijani legal due diligence. Previosuly, the EBRD’s Advice for Small Businesses helped the company to restate its financial statements in line with the International Financial Reporting Standards (IFRS).

Hydroponic technique is an eco-friendly way to cultivate crops. This non-conventional method enables producers to significantly reduce water consumption by foregoing the use of soil. This results in higher yields and increased efficiency through lower transpiration rates of the greenhouse plants.  

H&M Agro is one of the first agricultural producers in Azerbaijan that managed to establish commercial trade relationships with Gulf countries. Diversification of export markets by this producer is expected to have a demonstration effect on local agribusinesses.  

Azerbaijan is one of the largest exporters of fruits and vegetables in the region. Sustainability of its agribusiness sector is increasingly important as the country diversifies away from oil and gas predominance. 

The EBRD is a leading institutional investor in Azerbaijan. Since the start of its operations there in 1992, the Bank has invested more than €3.75 billion in 184 projects across different sectors including finance, corporate, infrastructure and energy, with most of those investments in private enterprises. The Bank’s strategy in the country focuses on helping Azerbaijan to diversify its economy and develop the non-oil private sector.