Deputy PM: New opportunities can be uncovered for energy co-op between Bulgaria and Azerbaijan (INTERVIEW)

Baku, Azerbaijan, June 24

By Leman Zeynalova - Trend:

Trend’s exclusive Interview with the Deputy Prime Minister and Minister of Foreign Affairs of Republic of Bulgaria Ekaterina Zaharieva on the occasion of her visit to Azerbaijan

Question:How do you assess the current status of bilateral relations between Azerbaijan and Bulgaria? In which spheres should the two countries develop the cooperation?

Answer:Bulgaria attaches great importance to its relations with the Republic of Azerbaijan and considers Azerbaijan as a priority partner in the region of South Caucasus and the wider Black Sea Region.

I would define the relations between our countries as very good. The existing close relations at highest level are of great significance for the development of the bilateral political dialogue. Here I would like to mention the official visit to Azerbaijan of the President Rumen Radev in October 2017, the working visits of the Prime Minister Boyko Borisov to Baku (January 2018 and February 2019) and the recent visit to Baku by Mrs. Tsveta Karayancheva, President of the Bulgarian National Assembly (20 – 21 June 2019).

A solid basis for deepening bilateral ties between Bulgaria and Azerbaijan is the Joint Declaration on Strategic Partnership between the Republic of Bulgaria and the Republic of Azerbaijan signed in March 2015 during the official visit of the President Ilham Aliyev.

The First session of the Strategic Dialogue that was established in accordance with the Declaration was held in Sofia on October 31, 2018 during the official visit in Bulgaria of Minister Elmar Mammadyarov. Back then, we discussed the fact that only 3 percent of the Bulgarian households are gasified which provides a strong potential for business development and Azerbaijani investments in Bulgaria. The format of the Strategic Dialogue provides us with the opportunity to discuss priority issues of our bilateral cooperation such as economics, energy and transport. My first official visit to Baku is a logical follow-up of this first session of the Strategic dialogue.

We see a great potential for developing the trade and economic relations, the cooperation in energy, transport, tourism, as well as in agriculture, pharmaceutics, science and education.

Q.: Is the existing level of trade turnover between the two countries satisfactory? What are the ways of boosting the mutual trade turnover?

A.:The volume of bilateral trade is persistently increasing. For the last year it has grown by 34.1 percent to $24.5million according to the Bulgarian statistics. Pharmaceuticals are the most important part of the Bulgarian export to Azerbaijan. Despite that growth and despite the existing excellent political relations, the economic ties between our countries definitely do not meet the potential Bulgaria and Azerbaijan have. A good tool for boosting the mutual trade is the Joint Intergovernmental Commission on Economic Cooperation the last session of which was held on November 6-7, 2018 in Sofia. A business forum with more than 100

representatives of the Bulgarian business and about 30 Azerbaijani companies took place within the session. We expect that all these efforts at governmental level will finally bring positive results. The Bulgarian-Azerbaijani Chamber of Commerce and Industry (BATIP), established in 2014, has also an important role in this process.

Q.: Which spheres seem to be more promising in Bulgaria and Azerbaijan in terms of attracting mutual investments?

A.:The economic development, purchasing power and financial resources of Bulgaria and Azerbaijan create opportunities for joint investment and cooperation in various fields of mutual interest, such as energy, tourism, construction, agriculture and others.

Bulgaria's membership in the EU creates possibilities for joint production and supply of goods for the European market and neighboring countries. Bulgaria is one of the countries that succeeds in maintaining macroeconomic and financial stability. We have the most favorable taxes in the EU and a highly skilled workforce. The Government also has a number of additional incentives to encourage investment.

One of the most promising directions for attracting investments is cooperation in the field of energy, for example: gasification and gas distribution, construction of gas infrastructure in Bulgaria and the region of South Eastern Europe, distribution of petroleum products on the Bulgarian and regional market, etc.

We are interested in specific projects in which Bulgarian and Azerbaijani companies can be involved as contractors or subcontractors, for example in the field of construction, in joint enterprises for food products, etc.

During the fifth session of the Bulgarian-Azerbaijani Economic Cooperation Commission, mutual interest was expressed in deepening cooperation in the field of nutritional supplements, production of veterinary products and animal medicines. On this basis, considering Bulgaria's rich experience in this field, the possibility of implementing a project for the establishment of a joint venture for the production of vaccines for animals and other products on the territory of Azerbaijan is considered.

Q.: How do you see the prospects for developing bilateral relations in ports industry?

A.: Bulgaria is interested in cooperation with Azerbaijan in the field of transport and communications. We should take advantage of the geostrategic position of our countries in building a good infrastructure between Europe and Asia. From this point of view and taking into consideration the significant potential of the Bulgarian Black seaports of Burgas and Varna and the existing national infrastructure, we emphasize the importance of the realization of the transport corridor linking the Caspian Sea and the Black Sea as well as the multimodal transport corridor Persian Gulf - Black Sea.

Q.: Gas deliveries from Azerbaijan to Europe, including Bulgaria, are expected to begin in 2020 through the Southern Gas Corridor. What are the benefits of purchasing Azerbaijani gas for Bulgaria in terms of cost and quality?

A.:The diversification of sources and routes for the supply of natural gas is one of the Bulgarian government's top priorities in the energy field. The Republic of Bulgaria conducts a consistent energy policy aimed at ensuring energy security for the country and the whole EU. Energy security is among the priorities of the Bulgarian presidency of the Organization for Black Sea Economic Cooperation and was a main priority of the Bulgarian presidency of the Council of EU last year.

By its participation in the Southern Gas Corridor Azerbaijan plays an important role in building energy connectivity between Europe and Asia. On one hand – thus, it will contribute to the diversification of natural gas sources both for Bulgaria and for the region. On the other – Bulgaria will receive quality gas at mutually beneficial prices for our country as well as the supplier – Azerbaijan.

As it is well known, our country has a contract for the delivery of 1 billion cubic meters of gas annually from Shah Deniz 2 site. This quantity represents about one third of Bulgarian gas consumption. That is why we are confident that this will seriously increase the security and diversity of the energy sources. This is a factor driving the competition in the sector for the benefit of all consumers.

Furthermore, new opportunities for energy cooperation between Bulgaria and Azerbaijan could be uncovered through the eventual participation of SOCAR in the gasification of the private households in Bulgaria.

Q.: Bulgaria is set to receive Azerbaijani gas via the Interconnector Greece-Bulgaria (IGB). How do you assess the overall progress in the implementation of this project? Will it be possible to complete it by the time of completion of the Trans Adriatic Pipeline (TAP)?

A.:We consider the Gas Interconnector with Greece (IGB) as a key project, part of the Southern Gas Corridor and its realization is a priority for the Bulgarian side. The IGB project will be completed within the required timeframe. The importance of the IGB was confirmed by the European Commission, which identified it as a "project of common interest". It will contribute to the realization of the Balkan gas hub and will help build a competitive and liberalized gas market in the region.

On May 22, 2019 the Prime Ministers of Bulgaria and Greece B. Borissov and A. Tsipras, the Vice-President of the European Commission M. Sevcovic and the First Deputy Prime Minister of Azerbaijan Y. Eyyubov gave the start of the construction of the IGB close to Kirkovo village, on the road to border crossing point “Makaza”. At present, all key selection procedures for contractors under national law have been carried out. This gives us the assurance that the project is now irreversible and will be put into commercial exploitation in 2020, according to the plans.

Undoubtedly, the realization of this project is a factor in strengthening the economic and geopolitical role of Bulgaria and Greece in the European Union.

The project is of strategic importance not only for our two countries but also for Europe, including the countries of the Western Balkans. Such connections contribute to peace and stability both in the Balkan region and in Europe.

As part of the development of the Southern Gas Corridor, Bulgaria and its neighboring countries will have access to alternative supplies from the Caspian region and the Eastern Mediterranean through the interconnector, as well as from existing and future LNG terminals. The project is of strategic importance for the realization of the Vertical Gas Corridor connecting the networks of Bulgaria, Greece, Romania and Hungary.