IFLR 1000
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Despite business in Azerbaijan taking a soft blow as a result of the global economic crisis, the pace of project financings refused to slow down and remained steady as the country continued to develop. Examples of major projects keeping the legal market on its toes include a highway construction project, the development and financing of a cement factory, a waste-to-energy plant project, and the establishment of a methanol plant....

Despite business in Azerbaijan taking a soft blow as a result of the global economic crisis, the pace of project financings refused to slow down and remained steady as the country continued to develop. Examples of major projects keeping the legal market on its toes include a highway construction project, the development and financing of a cement factory, a waste-to-energy plant project, and the establishment of a methanol plant. Traditionally an oil and gas-based economy, the financial turmoil elsewhere could not completely dampen the rate of growth in Azerbaijan, which saw an increase of 16% over the previous year.

Real-estate development is booming, infrastructure projects are alive and well, and foreign oil companies are still investing into the oil sector. "There is work in the market even though it's not so sexy," says one commentator. "Corporate work keeps flowing in and all the top firms are busy."

Pure finance and capital markets have borne the brunt of the weak global climate, with many observers noting that finance transactions have tapered off. "There is less foreign lending as we see European banks turn away," remarks one lawyer. Debt deals have dried up, with most banks reducing or closing their exposure to Azerbaijani borrowers and issuers. Needing fresh capital, some borrowers are beginning to look to international financial institutions such as EBRD (the European Bank for Reconstruction and Development) and IFC (the International Finance Corporation). "The IFIs [international financial institutions] are coming back into fashion," says one lawyer.

State corporate clients like Socar (State Oil Company of Azerbaijan Republic) continue to borrow in international loan markets and are keeping firms such as Baker & McKenzie and Omni Law Firm active. The M&A front has kept active with several key domestic and cross-border acquisitions.

Locally, Azertel's purchase of a major stake in Azercell and Baltika's buyout of local brewery Baku Castel was a talking point, while VTB's acquisition of a local bank and the Weir Group's purchase of Standard Oilfield Services characterised the inbound flow of mandates.