Support for Azerbaijan’s transport and logistics potential to remain one of EBRD’s core priorities – First VP (Exclusive interview)

Economy Materials 8 September 2023 12:00 (UTC +04:00)
Support for Azerbaijan’s transport and logistics potential to remain one of EBRD’s core priorities – First VP (Exclusive interview)
Maryana Ahmadova
Maryana Ahmadova
Read more

BAKU, Azerbaijan, September 8. We have been Azerbaijan’s longstanding partner for over three decades now and have a strong relationship with the country’s public and private sectors. But we still think that this is just the beginning, First Vice President of the European Bank for Reconstruction and Development (EBRD) Jürgen Rigterink, told Trend in an exclusive interview.

Visit to Baku as another milestone in expanding EBRD-Azerbaijan partnership

I am glad to be back to Azerbaijan which I last visited right before the pandemic. It is great to see Baku now back to its full vibrance.

The county has come a long way since our historic cooperation on the Southern Gas Corridor, when we invested 1.7 billion euros in Shah Deniz II, TANAP and TAP pipelines.

The economy has overcome many challenges and has become more resilient and more forward-looking as well.

There is now an ambitious decarbonization agenda underpinned by Azerbaijan’s Paris Agreement pledges. We also see that the country’s vision for 2030 prioritizes market-oriented reforms, business-friendly governance, and trade liberalization.

And now we are back to ask the question: how can we help to achieve your renewed priorities?

After our meeting in Davos earlier this year, I was delighted to have a great meeting once again with President Ilham Aliyev. We discussed concrete steps towards accelerating the EBRD’s activities in the country and beyond, and I would like to thank President Ilham Aliyev and his administration for this opportunity.

We also held sector-specific discussions with several key government ministers and stakeholders and had an opportunity to discuss further cooperation with some of our private sector clients as well. The essence of these meetings and the warm welcome we received fill us with expectancy that our partnership with Azerbaijan will grow significantly for the years to come.

EBRD's role in Azerbaijan’s decarbonization agenda

We play an active role in Azerbaijan’s decarbonization agenda, both in terms of domestic green energy generation and its export. Our support has a strong focus on investment, combined with complementary policy dialogue and technical assistance.

On the investment side, last year was a historic one as we supported the construction of the first privately owned, utility-scale solar power plant in Garadagh. I am confident that this project will be one of many in Azerbaijan.

In terms of policy support, our teams have been working with Azerbaijan’s Ministry of Energy on the renewable energy auctions schemes, and we are expecting the launch of the first such auction already by the end of this year.

Concurrently, we have been working with our Azerbaijani partners to assess the prospects for a low-carbon hydrogen production. Our study found that the country is more than capable to produce it at internationally competitive prices.

These measures coupled with our joint efforts towards grid improvements across the country provide a good start, but there are a few significant steps that need to be made for the country’s green ambitions to materialize.

Azerbaijan needs to develop a national hydrogen strategy prioritizing sustainable development laws and frameworks that would also be aligned with the relevant international regulations. The country also needs to further strengthen its power grid.

Much will also depend on potential milestone projects like repurposing investments in existing gas pipelines and the findings of the feasibility studies of ambitious projects like the Black Sea Submarine Cable.

We are looking at these developments with great interest and stand ready to offer further support to Azerbaijan’s quest towards greener and more sustainable future.

EBRD is keen to support the capacity development of the Middle Corridor

Until recently, up to 95 percent of freight traffic between China and the European Union went through the Northern Corridor. But the war on Ukraine has shown everyone the urgent need to diversify away from this route.

We can see that international carriers are increasingly looking for alternatives, leading to greater interest in the so-called Middle Corridor.

This development opens new trade opportunities for the Caucasus and for Central Asia to facilitate and reap benefits from China-Europe rail freight transportation.

We are supporting Azerbaijan and other countries on this route to make the most of this potential pivot, and one of the ways to do this is to invest in logistics and transport hubs across these countries.

We are actively supporting our clients, private or sovereign, involved in bridging Central Asia to the Caucasus. To name a few, we have recently invested in a storage facility near Baku, financed railway modernization in Kazakhstan, and engaged with the Maritime Agency of Georgia to help improve its port management systems.

Moving forward, our support to Azerbaijan’s transport and logistics potential will remain one of our core priorities in the country.

EBRD launches public-private partnership for technical and vocational education

Yesterday’s event was a testament to the merits of cooperation between the public and private sectors.

Avrora is our steadfast partner and a leader in the country’s food production industry. We supported the company in identifying skills gaps in its sector and co-developed a program to equip young female and male students to acquire the relevant skills.

With our support, Avrora will now partner the Azerbaijan’s State Vocational Education Agency to pilot a new Technical and Vocational Training.

The parties also signed the memorandum of understanding, joining forces to help address the skills shortage within the wider industry, in an inclusive and gender responsive way.

Apart from the benefits to the broader economy, such projects make real impact by opening new economic opportunities for all. I am confident that this will be one of the many other successful public-private partnerships in Azerbaijan.

EBRD Green Cities thrives in Azerbaijan's Ganja

The EBRD Green Cities program is attracting more and more cities with over 50 participating now to sustainably address their infrastructure and environmental problems.

Ganja is the only city in Azerbaijan that has joined the program so far and we have already signed two projects there.

The first is set to improve the city’s solid waste management, improving the city’s environment and public health. The second aims to modernize the city’s street lighting leading to significant energy savings and better road safety.

We are proud to be improving the urban environment for more than 300,000 people in Azerbaijan’s second largest city, but we would be delighted if even more cities joined.

If, and when, requested by the relevant authorities, we will be happy to evaluate investment opportunities in other regions of Azerbaijan as well.

EBRD's broad support for Azerbaijani banks and SMEs

To date, we have made the majority of investments in the private sector. We are actively working to do more in this direction, and where possible, to provide loans in the local currency.

One of our key priorities now is to strengthen local financial institutions so the private sector has better access to finance for growth. As part of this effort, we are actively looking to extend the number of our partner banks in 2023 and beyond.

Additionally, we are working towards supporting the growth of financial markets at the regional level, while increasing our involvement in trade finance.

We are also seeking ways to increase our lending to micro, small, and medium-sized enterprises and to support SME competitiveness, green finance, women-led businesses, and youth employment opportunities.

Opportunities are plenty, but there is still a lot of work ahead of us. Our team in Baku will keep you updated on our progress.