Bilateral agreement between EU and Azerbaijan to open doors for new co-op opportunities - ambassador

By Trend

The new comprehensive bilateral agreement between Azerbaijan and the EU will give us new opportunities for cooperation, EU Ambassador to Azerbaijan Peter Michalko told Trend in an exclusive interview.

“The negotiations are ongoing intensively. They have to be finalized to have the agreement ready,” Michalko noted.

Our most important cooperation priorities with Azerbaijan include the development of renewable energy sources, digital transformation, and the transport sector, he said.

Regarding the cooperation in the energy sector, the ambassador noted that there are bright prospects for further increasing the supply of Azerbaijani gas to Europe. He mentioned that the Southern Gas Corridor (SGC) project made it possible to directly supply Azerbaijani gas to the EU countries.

“There are many opportunities to increase exports, which, in turn, require new steps. The EU counties are definitely interested in increasing energy products imported from Azerbaijan. We hope to achieve this in the nearest future,” Michalko said.

Further speaking, the ambassador noted that companies from the EU are very interested in implementing projects in Azerbaijan’s renewable energy sector.

Renewable energy is a very perspective area of cooperation for several reasons. This is of course a priority for the EU in support of “green” transition, and also an important objective in our cooperation with Azerbaijan,” Michalko said.

In regard to participation in particular projects in the sector, the ambassador said that the auctions system will be very helpful for the development of renewable energy and bring more investments from abroad for the benefit of Azerbaijan.

According to the ambassador, recently it was announced that the EU can mobilize up to 2 billion euros under this investment plan for Azerbaijan. This also includes the support for the renewable energy sector.

He also noted that the support that the EU is offering for Azerbaijani governmental institutions includes preparing the legislative framework for a “green” energy transition.

“We have supported several projects in this regard that strengthened the authorities and their capacity in the preparation for the implementation of the laws that are related to energy efficiency. It is important for this prepared framework to bring adequate benefits,” Michalko added.

Regarding the trade between Azerbaijan and EU countries, the ambassador noted that it has a huge potential for growth.

According to Michalko, the new comprehensive bilateral agreement will create additional opportunities for increasing Azerbaijani exports to the EU.

“We would like to see more Azerbaijani products in Europe. We also see the growth of Azerbaijani non-oil products on the EU market, which is a successful step towards increasing bilateral trade. Moreover, the trade turnover between Azerbaijan and the EU in 2021 even exceeded the pre-COVID-19 pandemic level,” he said.

“The trade turnover between the EU and Azerbaijan in 2019 amounted to nearly 12 billion euros, and 15.5 billion euros - in 2021. This once again indicates that the EU is the main trading partner of Azerbaijan with a 45 percent share in the Azerbaijani foreign trade turnover. The EU is also the largest export destination for Azerbaijani products. The EU countries account for 51 percent of Azerbaijan's total exports,” Michalko noted.

Besides, according to the ambassador, the EU supports several initiatives toward improving the business environment and reforms to allow Azerbaijani companies to increase their production capacity and export potential.

“We are preparing the sixth edition of the EU Business Climate Report in Azerbaijan. It will be presented at the EU-Azerbaijan business forum scheduled for May 17. I’m sure that this will help attract potential investors to Azerbaijan, and increase current investment and production,” he said.

He said that the annual EU-Azerbaijan Business Forum will be held in a hybrid format. “We hope that this format will help expand the list of its participants,” Michalko added.

Among other initiatives of the EU regarding Azerbaijani investment climate development, the ambassador mentioned the support that will be provided for 25,000 small and medium-sized enterprises in the country.

According to the ambassador, the EU has expressed readiness to be a part of the restoration works in Azerbaijan’s Karabakh. “Our sectors of possible cooperation include the renewable energy sector, infrastructure, transport connections, and any other areas that will need additional support,” Michalko said.

As Azerbaijan is implementing the “smart” villages and cities project in Karabakh, Michalko said this sector is also among the EU’s priorities, as well as rural and regional development in general.

Further speaking, the ambassador noted that the EU supports Azerbaijan’s priority to turn Karabakh into a “green zone”, and is eager to participate in renewable energy projects.

“We are interested in knowing the priorities of the Azerbaijani side. We have our experts that would also see the need for reconstruction work in Karabakh. Now we expect project ideas that could be supported from the EU side,” the ambassador said.

The ambassador also spoke about current EU programs carried out in Azerbaijan. “As I have already mentioned, we have entered our new annual budgetary cycle. Now we are in the phase of planning and programming. Again, recall, that under this support 2 billion euros have been announced. However, there are also other parts of the program from which Azerbaijan can benefit. Some of them are bilateral, some are regional, and event global funds of the EU,” Michalko said.

According to the ambassador, there are programs, such programs as ERASMUS+, from which thousands of Azerbaijani students benefited from the opportunity to study in the EU universities. Another program is Horizon Europe, which supports research and scientific cooperation.

“Other programs support companies and local development. “Mayors for economic growth” is one of these programs. “EU4Lankaran” is another program that is financed by the EU and implemented by the UNDP. There is a big number of possible projects from which Azerbaijan, its business, and civil society, can benefit. Azerbaijan is also a front-runner in the “twinnings”, and a leader among the countries of the Eastern Partnership,” he added.

The EU will continue providing support and increase the involvement in projects implemented in the country to increase and further enhance the cooperation with Azerbaijan, the EU Ambassador Michalko concluded.