European Commission official: MoU on Strategic Partnership in field of energy intensifies cooperation between the European Union and Azerbaijan -EXCLUSIVE INTERVIEW

Lawrence Meredith, The European Commission

© APA | Lawrence Meredith, The European Commission's Director for Neighbourhood East and Institution Building

# 09 December 2022 16:36 (UTC +04:00)

The European Commission's Director for Neighbourhood East and Institution Building, Lawrence Meredith intervieüed by APA Agency

Mr. Meredith, you had meetings with Azerbaijani officials to discuss the European Economic and Investment Plan with the objective of mobilizing up to EUR 2 billion, its details. As we know the projects funded by the European Economic and Investment plan are being adapted to the specific needs of each partner country. I would like to ask about the specific needs of Azerbaijan.

Well, thank you very much indeed. This is my third visit to Baku and I am particularly pleased to have the opportunity to be here at the mandate of European Commissioner Varhelyi with whom I work to follow up on the launch of the Economic and Investment Plan by the European Union with Azerbaijan. We believe this can bring a big transformation to the people of Azerbaijan in a wide range of areas and we discussed in particular three areas: firstly, connectivity.

We have been investing in the Port of Baku, helping to bring it solar panels, but also we see huge potential, in the face of new geopolitical realities, clearly, Azerbaijan has a key role to make a connection between the Black Sea and the Caspian Sea. It is particularly important to reach out to the European Union. We also discussed Black Sea connectivity, the submarine electricity cable potential is of particular interest and that means the second area we want to discuss which is green growth. And here we see, as you know, President of the European Commission Ursula von der Leyen signed with Azerbaijani President Aliyev an important Memorandum of Understanding (MoU) on gas but also on renewables.

We wish to work together through this Investment Plan on wind, solar, and green hydrogen, we see huge potential for joint cooperation in this area. And the third area is access to finance which is very important. We already provided support to 13 000 small and medium-sized enterprises.

Actually, I visited Salyan because we think that it is particularly important to cover the whole country of Azerbaijan. We met a very interesting tomato producer who wants to export precisely to new markets and to bring these up to European Union standards. And to achieve all of these is also important to come to new cooperation, to promote reforms, for example, working together on judicial reform, building capacity through training, and also just having a meeting with civil society discussing the need to bring these benefits to the people of Azerbaijan and at large.

The European Union officials highlight that these investments should be accompanied by clear progress in judicial reforms, public administration reforms, and human rights...

We think it is very important to continue the reforms. As you know these are issues that we discuss at our regular meeting with the Partnership Cooperation Council. And we are here today also to discuss capacity building and training. This is something we just discussed the importance of transparency and an investment climate. This is something why we believe the Economic and Investment Plan can really bring benefits to all the people of Azerbaijan.

By the way, within the framework of your visit to Baku, the European Union and Azerbaijan jointly inaugurated a high-level working group on the EU's Economic Investment Plan. What will be the task of this working group and how often representatives of this group will meet?

Thank you very much. The aim of this new high-level working group is precisely to accelerate the implementation of the economic and Investment Plan in these areas we discussed, connectivity, green growth, and access to finance and that is why we decided to be important to meet at least twice per year and in between our teams will be working very closely on the individual projects to ensure the benefits to be brought rapidly to the people of Azerbaijan.

The European Union has already expressed its interest in cooperation with Azerbaijan on green energy. On the other hand, Azerbaijan is a country with large oil and gas resources. Indeed, it is interesting that the EU wants this cooperation with oil and gas-rich Azerbaijan. How do you assess the country's potential in renewables?

– As you know there is a common vision, a common interest. In essence, President von der Layen has made clear that Europe as a continent needs to be climate-neutral by 2050 and President Aliyev is committed to substantially increasing the share of renewables and energy mix here in Azerbaijan. That is why we see a strong common interest as embodied in the Memorandum jointly signed in July. Where we do see particular potential, I think, this very strong potential is in wind, solar, and also green hydrogen. And that is why to make this effect we are also working with European Investment Bank, European Bank for Reconstruction and Development as well as member states, and development and finance institutions because the strength of the economic and investment plan is by bringing together and mixture grants and loans. This is going to really accelerate the implementation of this transition towards renewables.

According to some local experts, the legislative environment in Azerbaijan for the implementation of projects aimed at green energy is not sufficient. How can the European Union share its experience with the country to improve that environment?

One of the aspects we have been discussing is the advantages of working together with the European Union and particularly the European Investment Bank, European Bank for Reconstruction and Development is precisely our ability to bring in know-how in these sectors, and exchange with Azerbaijani experts on local conditions to see how to adapt not only local legislation, but it also involves new skills, it involves new infrastructure, facilities. So, it needs to be an integrated and holistic approach to renewables, to be truly effective. We believe that by the vision of this Economic Investment Plan and the joint commitment to renewables, we will substantially accelerate Azerbaijan's move into renewables which is a joint and common goal.

In July the European Union and Azerbaijan signed an MoU on a Strategic Partnership in the Field of Energy in this regard how do you assess the importance of Azerbaijani gas for Europe?

Well, I would look at it in a holistic way. I believe the Memorandum of Understanding firstly intensifies cooperation between the European Union and Azerbaijan. And of course, the commitment to double supplies is an important element. We just discussed how important also is the joint engagement on renewables and in that sphere by the common vision we see the future both of Azerbaijan's energy but also European Union's energy. This movement towards green is extremely important and also is in the interest of people both here in Azerbaijan but also in the European Union. So, I think accelerating the transition through wind, solar and green hydrogen is in joint interest.

Western Balkans have already expressed their interest in increasing the supply of Azerbaijani gas. In this regard, how can the EU support these countries for the transportation of Azerbaijani gas to this part of Europe?

Clearly, the increasing gas supply is especially important in the context of new geopolitical realities. This is something that will benefit the European Union and also benefit of Western Balkans. This is an aspect on which we are also working jointly.

The current situation has also impacted connectivity and transportation. Taking the developments into mind, we often hear about the importance of the "Middle Corridor". How do you assess the importance of this initiative in ensuring stable and reliable transportation between the West and the East? How are the development prospects of this corridor assessed by the EU?

Thank you very much indeed. As I said early, connectivity is one of the main areas that we want to work together not only with Azerbaijan but with Eastern Partnership as a whole. And I recently accompanied Commissioner Oliver Varhelyi also to Georgia and that underlines, I believe, how important the East-West connections are linking Azerbaijan and Eastern Partnership and the European Union. And here I would particularly underline one hand the Black Sea connectivity and that means the submarine electricity cable but fiber optic cable and also physical connections through ferries which traditionally used to exist which we are now looking at both the European Union side and the Eastern Partnership side together with Georgia to strengthen that is the benefit of the whole region in the Caucasus. And looking beyond of course here in Baku, the Port of Baku which is in the process of an impressive modernization exercise. ....., also beyond the Caspian Sea links Central Asia and I think that is really important, a historic trade route which is we have seen a substantial increase, already 70% this year in increased transit.

So, clearly, it is a joint interest, that is why we are trying to bring in European Investment Bank, and European Bank for Reconstruction and Development and helping companies meet European Union and international standards, providing know-how, as well as modernizing infrastructure that is really crucial to increase the trade between the European Union and Azerbaijan.

And my last question. As already mentioned that European Union planning to mobilize 2 billion euros within the Economic and Investment Plan. I would like to ask if is there any mechanism that the EU applies to monitor that this finance is properly spent by a partner country in a transparent way.

Clearly, firstly there is indeed a potential to reach up to two billion euros that are through engaging with the European Investment Bank and European Bank for Reconstruction and Development. Both organizations accompany this mission and also member states, development, and finance institutions. That of course implies working in a transparent way we already discussed the importance of investment climate and further progress in judicial reforms and public administration reform. This all is extremely important issues and we are already delivering nearly 90 million euros of this Plan but the whole plan, the purpose of this working group is to accelerate the implementation, to look at the issues jointly, and to see what we need to do, whether it is on the technical side, whether in terms of further reforms to accelerate the implementation of Economic and Investment Plan as a whole and to ensure it really reaches the people of Azerbaijan and managed in a transparent way.

Photo - Ilkin Nabiyev © APA group