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EU expects request to provide first tranche for energy sector of Azerbaijan within ENP

Oil&Gas Materials 10 August 2009 20:07 (UTC +04:00)

Azerbaijan, Baku, August 8 / Trend , I.Khalilova /

The European Commission stands ready to provide the first tranche of technical assistance for the energy sector of Azerbaijan after the development of a mechanism to implement the indicative program 2007 under the European Neighborhood Policy (ENP), coordination bureau executive director of EU technical aid programs to Azerbaijan (Tacis) Rufat Mammadov said on August 10.

"Within the financial memorandum signed in late last year, the budget of indicative program 2007 was approved in amount of €19 million, and the first tranche under the instrument of sectoral budget support for the energy sector may be requested by the end of 2009," said Mammadov.

The funds of technical assistance under the program will be used in three directions - tool for sectoral budget support, twinning program and technical assistance. For twinning program, it is intended to provide €5 million for about five projects, and €14 million (€1 million for technical assistance for budget support) for other two components. Energy sector was selected under budget support instrument, and notably through the financing of the budget, there are plans to hold legislative and administrative reforms in this sector.

Funds to the state budget will be transferred in three tranches. Unlike the first tranche totaling €3 million, the next two tranches will be accompanied by Azerbaijan's implementation of certain conditions of the EU. According to Mammadov, the EU offers in the first phase to develop a strategy of reform in the sphere of renewable energy and energy efficiency. Then there will be prepared an action plan to implement the strategy, the legislation in the sphere of renewable energy and energy efficiency. The strategy also called for the establishment of an agency to regulate alternative and renewable sources of electricity, on which the President issued a decree recently. The Agency will be established under the Ministry of Industry and Energy.

Within 2007 programs of ENP, currently partners are selected on the twinning project for the Agency on Standardization, Metrology and Patents and the Central Bank of Azerbaijan. Initially each structure will receive technical assistance at €1 million.

The ENP budget envisaged for Azerbaijan, for 2007-2010, totals €92mln.

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