Azerbaijan, Baku, Jan. 8 / Trend I.Khalilova /
The European Commission is likely to provide the first €3 million tranche for technical assistance to the energy sector of Azerbaijan as a part of the European Neighborhood Policy (ENP) action plan for 2007 in January, EU Technical Aid Programs (Tacis) Coordination Bureau Executive Director Rufat Mammadov said.
"Within the financial memorandum signed in 2008, the budget of indicative program 2007 was approved in amount of €19 million, with €13 million provided for the energy sector through the instrument of sectoral budget support for the state budget," Mammadov added.
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 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. The main work on these sectors will be launched after the country receives the first tranche.
Then an action plan will be prepared 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 energy and energy efficiency.
Under the EU recommendations, the country has established an agency to regulate alternative and renewable sources of electricity under the Industry and Energy Ministry.
The EU will allocate the next tranches, €5 million each, after the implementation of these action.
The ENP budget envisaged for Azerbaijan, for 2007-2010, totals €88mln.