UK is strongly determined to support Azerbaijan’s important diversification agenda - Baroness Nicholson (INTERVIEW)

Armenian-Azerbaijani conflict Materials 20 October 2020 10:37 (UTC +04:00)

BAKU, Azerbaijan, Oct.20

By Leman Zeynalova – Trend:

Exclusive interview of Trend News Agency with Baroness Nicholson of Winterbourne

Question: What are the priorities of trade relations between the UK and Azerbaijan at the moment?

Answer: It is a very great honour to be re-appointed as the Prime Minister, Boris Johnson’s Trade Envoy for your wonderful country. I am looking forward immensely to supporting the British Embassy in Baku in its tireless work to strengthen trade relations between our two great nations.

As a regular visitor to Azerbaijan I have been horrified to see news of the deadly attacks on Ganja, Terter, Beylagan and other towns and cities. I feel the deepest sympathies for the ordinary people who have been killed and injured and those whose homes have been destroyed. I previously opened a British Learning centre for children displaced by the conflict and so was shocked to hear the staff working in our learning centre in Terter had to evacuate. The UK will renew its assistance to conflict-affected children as soon as we can.

We see the key priority as rebuilding our economies during and after the Covid-19 global pandemic. This must be the first task for us all particularly for those companies and institutions which have been worst hit.

Energy remains a key priority but as you know from our previous work together, the UK is strongly determined to support Azerbaijan’s important diversification agenda. We seek to do more in healthcare, agriculture, tourism, education and retail, all highly important sectors of a more diversified agenda. Together with the British Embassy in Baku I stand ready to help in anyway I can. Despite the pandemic, we are already furthering some of these high value sectors and we all look forward to doing more over the next few months.

Q.: Which steps would give a new breath to the economic relations of the two countries?

A.: The imperative is always to bring buyers and sellers together. I hope we can do more to encourage people to visit Azerbaijan – and Azerbaijanis to visit the UK – so that our business-people and producers can meet each other face to face. Zoom is a wonderful tool as it enables communication without physical travel but it can never replace the human touch.

Sectors outside of oil and gas in Azerbaijan remain less familiar to UK firms and the diversification agenda gives us an exciting opportunity to change this. Representatives of the Food Safety Agency of Azerbaijan visited the UK in January and their visit has laid solid ground for future cooperation. The British government also funded three days training for a local agronomist in March to support Azerbaijan’s development of your agriculture sector.

More Azerbaijan buyers taking advantage of UK Export Finance would also help closer collaboration between our two countries. UK Export Finance, a key part of the UK Government, has £4 billon in export credit available for Azerbaijan buyers. UKEF can help buyers in Azerbaijan to gain access to the financial support they can procure from the UK.

Q.: Which spheres in Azerbaijan are of greatest interest for UK companies in terms of making investments?

A.: The UK is the biggest foreign investor in Azerbaijan; most of which is in the energy industry. I think it essential to attract investors in other sectors and this helps push forward the country’s diversification agenda.

First, in order to secure investment project owners will need to invest there. I suggest Azerbaijan project owners spend time and resource in packaging investment opportunities in a way that appeal to international investors. However, the feedback I get from UK investors is they sometimes look elsewhere because it is not always clear how they will get a financial return. UK firms have developed extensive experience in helping to package together investment opportunities and to conduct feasibility studies. The Embassy is ready to introduce project owners to UK firms who have this expertise. I urge Azerbaijan businesses to take up this important and timely opportunity.

Secondly, we must ensure that your policy framework does not appear to disincentivise investors. For example, a decade ago, the UK wanted to attract investors to create a Waste to Energy industry. We offered to work with industry to identify investment barriers and develop methods of overcoming them. A decade on we have a thriving Waste to Energy sector and the original investors are now looking to become exporters. Azerbaijan is now developing her renewable and energy efficiency regulations and the UK is keen to support Azerbaijan to develop this too.

Q.: What are the two countries planning to do in the post-pandemic period to return to the previous level of economic relations?

A.: The ending of the Covid-19 pandemic already gives us a chance to improve our nations in a number of different ways. I am thinking particularly of cleaner air, greener economies and of catching up on education needs for those students whose opportunities were either insufficient in the past or diminished at the height of the pandemic. We could look carefully at the training and education for girls and women in both our nations. We share a common heritage of votes for women for the past 100 years but in some areas of economic advancement female participation has not always matched that early triumph. Now will be the moment to look at that as well as to look at job training and opportunities for some other less advantaged young people such as the disabled. So we can look forward during this time of slow and even negative economic growth to create a better future as we have this time to plan.

In the immediate term, access to healthcare is a prerequisite to sustainable economic growth in any country. The UK Government provided financial support Azerbaijan’s PROACT project, which was created to help strengthen hospitals response to COVID-19. PROACT project provides training for healthcare workers and mobile health clinics that support vulnerable people in villages. I hope we can work together on this crucial prerequisite for a healthy workforce in both our nations.

In the medium to long term, many analysts think the days of oil and gas prices of $70-80 a barrel are gone forever. Capital markets have shifted, and clean power stocks are up 45% this year. These global trends demonstrate the government is right to focus on diversifying its economy and the UK will support Azerbaijan with this important strategic priority.

Q.: The projects operated by UK company BP are well underway in Azerbaijan starting from new projects to almost already realized Southern Gas Corridor. What is the level of interest of other new UK companies in Azerbaijan’s energy sphere?

A.: There is tremendous interest in Azerbaijan’s energy sphere. The more British firms have successful engagements with the Azerbaijani market, the more word spreads and others want to get involved!

There are 300-400 UK energy firms in Azerbaijan which shows the level of interest in Azerbaijan’s energy sphere. These companies create thousands of jobs for Azerbaijan citizens, generate billions of manats in tax revenues and help bring new skills and knowledge to Azerbaijan’s work force.

The British Embassy receives a regular stream of enquires from UK firms about energy projects in Azerbaijan. These companies are not seeking to compete directly with local companies; instead they offer specialist expertise, skills and products that can enable Azerbaijan to develop its projects faster, safer and in a way that offers the best value for money.

Q.: Azerbaijan aims to increase the share of renewable energy in its energy mix from 17 to 30 percent in 2030. How can the two countries cooperate in this sphere?

A.: In so many ways! My Azerbaijani friends recognise the goal of increasing rapidly your output of wind and solar energy. Carbon-based fuels are likely to be phased out over the next 10-30 years as they create emissions which cause global heating.

Azerbaijan has strong potential for both offshore wind and solar energy. The UK is world leader in offshore wind with 7.6 GW of installed capacity, which is the largest in the world. Next year, the UK Government will help fund a World Bank Study in to help develop a roadmap for Offshore Wind in Azerbaijan.

Solar capacity in the UK has increased from 5,488.6 MW in 2014 to 13,447 MW across 1,041,745 installations. UK Export Finance is currently supporting the 2nd largest solar project in the world in Turkey and I hope there is scope to do the same in Azerbaijan. UKEF has an additional global £2bn fund of Direct Lending capacity available for "clean growth" projects which is based on Green Bond principles. This could be a great opportunity for Azerbaijan organisations interested in renewable energy projects.

The UK has wide-ranging expertise encompassing everything from research to innovation, through to the manufacturing, construction and deployment of renewable energy as well as the policy and regulatory expertise required to support these. There are also over thirty UK companies already in Azerbaijan with renewable energy capability, which are keen to share their knowledge and expertise.

I was pleased that the Embassy recently published a picture of me using an electric taxi in Baku’s beautiful and historic old town. These taxis are quiet, make no air pollution and reduce greenhouse emissions, particularly in partnership with renewable energy generation. It is my hope that in the fairly near future all our cars will be electric.


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