Problems of Salaries in Azerenergy

The difficulties with the issue of salaries at the state electricity producer JSC Azerenergy increasingly worse.

One of the employees of the company in Baku told Turan that they have not been paid since August. Other employees of the regional offices reported to the agency that their salary is usually accrued on credit cards by the first of the month, however, after the devaluation of the manat since May money began to come to the cards in the third week of each month. And now this has stopped.

The state-owned company was unable to give a comment on these facts.

Despite billions of dollars of investment, Azerenergy has proved to be inefficient. Its debt to the state oil company SOCAR for the supplied fuel has reached half a billion manat for the last three years. And to support the JSC, the Cabinet of Ministers decided in July to postpone repayment of the tax debt of the regional electricity distribution networks of Azerenergy sent to the balance of the power distribution company Azerishyg JSC in midsummer until 31 December 2020.

In June Fitch Ratings noted that the devaluation of the manat by 34% reduces the creditworthiness of Azerenergy because of the currency mismatch between the company’s debt and revenue. At the end of 2014 almost 80% of the company's debt was denominated in foreign currency, while almost all of the revenue is denominated in local currency. Problematic are the assets that have significant depreciation and require financing of about 2 billion manats in 2015-2017. In the next three years, the company’s cash income will be reduced almost twofold from 230 million manats in 2011-2014 to 125 million AZN in 2015-2018.    -0-