BAKU, Azerbaijan, October 24. The EU needs to put maximum effort into the implementation of the Memorandum of Understanding (MoU) between Azerbaijan and the bloc on doubling the capacity of gas supplies to Europe by 2027, Damjan Krnjević, Former Adviser to the President of Serbia, Director for Policy Research, Analysis, and Publications at the Institute for Development and Diplomacy within ADA University, told Trend.
“Everything that was agreed on the MoU must be carried out. Maximum flexibility must be shown, because both Azerbaijan, and the EU have mutual interest in its implementation, which is doubling the capacity by 2027. And an integral part of that has to do with how the financing structure takes place,” he said.
According to the expert, the European Bank for Reconstruction and Development (EBRD), as well as the European Investment Bank (EIB) have obtained the policy that does not allow these banks to invest in new hydrocarbon-based projects.
“The EBRD has already softened its view, and the EIB, as people say, is also on its way to revise this decision. Both of these issues, along with the financing from Azerbaijan, and all the countries on the way, will increase the likelihood that all of this is going to be financed properly. This is in the foremost interest of the EU,” Krnjević noted.
He pointed out that this initiative is not going to be fully financed by those banks.
“Market test that will happen in January, that will more likely pass, will mean, that it is going to be commercially viable, which also means that the aspect of the financing that will come from any bank will be relatively small, but it is still important, especially in the context of the Western Balkans, because the EBRD has prioritized energy connectivity in regard with this region. So, I am almost sure that the bulk of the financing will come from the EBRD. With the respect to the EIB, it is complicated, but it will be an important political gesture, given the political emphasis on the part of the EU towards the importance they have placed on the MoU,” he added.
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