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Baku 2015: A showcase for regional cooperation

Dimitris Giannakopoulos

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The 10 most important things you need to know on Caspian Sea Region for Friday, June 12:

1Host of the European Games offers a showcase for regional cooperation. “European Olympic Committee President Patrick Hickey stated that Azerbaijan was the only country that stepped up to host the first European Games. As Azerbaijan’s 25 years of independent history prove, this is not the first time the nation has led the region through real deeds, not just by words and declarations. In 1998, Baku hosted the first summit of a major international initiative — Transport Corridor Europe-Caucasus-Asia (TRACECA). In 1994, a major international energy deal “the Contract of the Century” was signed in Baku, and by 2006, the strategic Baku-Tbilisi-Ceyhan oil pipeline, one of the largest infrastructure projects in the world and by far the largest in the region, was completed. Today, Azerbaijan is the engine and the source behind the ambitious Southern Gas Corridor, the only feasible source for new natural gas for European markets. The Baku-Tbilisi-Kars railway link will dramatically shorten the transit time along the historic Silk Road by connecting the Asian and European railway systems. Moreover, Baku hosts the regular World Forum on Intercultural Dialogue, a platform for the exchange of ideas among global religious and cultural leaders” writes Elin Suleymanov for the Washington Times.

2Several U.S. officials tell CNN the Obama administration does not doubt reports accusing Israel of using a new virus to spy on the Iran talks, but also do not believe there has been any data breach. “We don’t use unsecure hotel computer systems, so if that is what they infiltrated, they would not be able to get anything from us,” one official said. “We always set up our own secure systems when we hold meetings at hotels, and that is true no matter where we are.” However, the U.S. does believe that Israel has been spying on the U.S. and all of the other participants involved in the talks.”They do it all the time,” another official said. “They did it last year, and they did it again this year. This doesn’t come as any great surprise to anyone.” Elise Labott and Evan Perez for CNN.

3A Machiavellian Plan Against Russia? “To the Kremlin, recent events in its backyard have proved once and for all that the amorphous body known as ‘the West’ – its politicians, institutions, media, diplomats, armies, financial architecture and governance bodies – are not to be trusted. The charge sheet is long and contested: it starts with NATO’s ‘out of theater’ bombing campaign in Yugoslavia in 1999, includes broken promises over eastern European integration into the EU and NATO in the early 1990s, color revolutions in neighboring states, botched interventions in Afghanistan and Iraq, destabilization in Libya and Syria, repeated attempts to find common security architecture rebuffed, and leads to the revolution/coup that took place in Kiev in March 2014, breakaway regions in eastern Ukraine, subsequent political and economic sanctions against Russia and, most recently, threats to remove Russia’s FIFA World Cup hosting rights in 2018” writes Timothy Stanley for the Forbes.

4Kazakhstan and Africa – Right Time to Build Ties, Seek Mutual Benefit. “Strengthening our links with Africa should be about more than pure economics. The world is going through an unpredictable and challenges phase. The African continent has not been immune from the evil of extremism. Terrorist groups such as Boko Haram have caused fear and immense suffering. The Ebola crisis last year was the source of great worldwide panic. Food and water shortages in Africa cause devastating ripples throughout the world. Kazakhstan is determined to do what is necessary to help. Last year we sent officers to a UN peacekeeping mission in Western Sahara and Cote d’Ivoire, and consider doing the same in Liberia. We have also donated $300,000 to the “African Union Support to the Ebola Outbreak in West Africa” (ASEOWA) aid program to fight the epidemic that hit the large part of the continent so badly. Last year, Kazakhstan acted jointly with the UN Development Programme to launch a project to support and deliver development assistance to countries in Africa, Oceania and the Caribbean through capacity-building training for young professionals” writes Minister of Foreign Affairs of the Republic of Kazakhstan Erlan Idrissov for the AllAfrica.

5Forecast for oil production in Azerbaijan. The Organization of the Petroleum Exporting Countries (OPEC) has not changed its outlook on oil production in Azerbaijan in 2015. As it was planned, in 2015 oil production in Azerbaijan will decrease by 30,000 barrels per day and reach 0.82 million barrels per day, OPEC’s monthly report on the oil market said June 10. In April, oil production in Azerbaijan amounted to 0.86 million barrels per day, having decreased by 20,000 barrels per day compared to 2014, according to the report.

6Turkmenistan plans to build export gas pipeline. Turkmenistan plans to complete construction of the East-West main gas pipeline by late 2015, the message of the Ministry of Oil and Mineral Resources of Turkmenistan said. This pipeline must unite all the major gas fields of Turkmenistan into a single system, as well as create conditions for the export of Turkmen gas to world markets in either direction.“The commissioning of the pipeline, which will pass through the territory of the whole country, will serve as an additional guarantee for the smooth resource provision not only of domestic demand for “blue fuel”, but also the existing and planned international pipelines,” the message said. The new regional gas pipeline is being laid from Shatlyk to Belek. It is designed to transport natural fuel from the largest fields in the eastern regions to the country’s other gas pipelines, to increase the volumes, to improve the reliability of the gas supplies for export, as well as for the domestic gas supply.

7Moscow Moves to Strengthen Iran in Its Standoff With West. “Iran seems to have powerful friends in Moscow and the Russians’ main argument seems to be: We may lose Iran if we hesitate—a fear Sanai and other Iranian officials are constantly promoting. During the Cold War, Iran was a close US ally until Shah Reza Pahlavi was overthrown by the Islamic Revolution in 1979. Many policymakers in Moscow fear that the Obama administration is anxious to clinch a P5+1 deal with Tehran because it is trying to upgrade the US’s tacit alliance with Iran. Russians worry that the US-Iranian relationship in the region could evolve from jointly opposing the Islamic State in Syria and Iraq into something much bigger—perhaps once again turning Iran into a military and intelligence-gathering base for the United States” writes Pavel Felgenhauer for the Jamestown.

8Baku, Azerbaijan: 10 of the city’s weirdest tourist attractions. With Baku hosting the inaugural European Games, Sophie Ibbotson uncovers 10 of the most unusual things to see in the city [telegraph]

9Iran plans to establish a joint rail transport company with Kazakhstan, said Abbas Nazari, the director for international affairs at the Iranian Railways Company. The proposed company will be established through a joint venture and will carry out rail transport operations for the two sides, Iran’s Fars news agency quoted Nazari as saying on June 10. He referred to a recent visit of the director of Kazakhstan’s railways company to Iran’s Shahid Rajaee Port, saying that Kazakhstan has announced readiness to establish silos in the Iranian port in order to store wheat. 10 million metric tons of Kazakh wheat is transited via Iran, he noted.

1030 under 30: Moscow’s young power list. The ‘fresh-faced’ politicians, hipster editors and radical post-Soviet artists shaping the fabric and the future of Russia’s capital city [the guardian]

Journalist, specialized in Middle East, Russia & FSU, Terrorism and Security issues. Founder and Editor-in-chief of the Modern Diplomacy magazine. follow @DGiannakopoulos

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New ADB Platform to Help Boost Financing for Climate Action

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The Asian Development Bank (ADB) has launched a new platform aimed at helping its developing member countries in Asia and the Pacific mobilize funding to meet their goals under the Paris Agreement.

The NDC Advance platform will help countries mobilize finance to implement Nationally Determined Contributions (NDCs) regarding greenhouse gas emissions that each country has voluntarily committed to under the Paris Agreement. NDCs also describe priority actions for countries to adapt to climate change.

The announcement was made at the 24th Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP24) in Katowice, Poland, which is aiming to finalize a rulebook for the Paris Agreement when it goes into effect on 1 January 2020.

The agreement aims to limit the increase in the global average temperature to below 2°C, while aiming for 1.5°C.

“Through their NDCs, our developing member countries have made ambitious commitments to respond to climate change,” said ADB Vice-President for Knowledge Management and Sustainable Development Mr. Bambang Susantono. “We need to ensure that countries are able to mobilize the needed financing to deliver on their commitments. NDC Advance will help countries devise investment plans to tap financing from a variety of sources and to implement priority projects effectively.”

NDC Advance is funded through a $4.55 million grant from ADB and will have three aims: providing technical assistance that helps countries better engage with potential sources of climate finance and to make use of innovative finance mechanisms; identifying and prioritizing climate projects; and supporting countries in tracking how projects deliver against their NDC goals.

The new initiative will help propel the climate actions ADB has committed to under its Strategy 2030 program.

ADB earlier this year committed to ensuring that 75% of its operations will support climate change mitigation and adaptation by 2030, while providing cumulative climate financing of $80 billion from its own sources between 2019 and 2030.

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Egypt: Shifting Public Funds from Infrastructure to Investing in People

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Egypt has an opportunity to capitalize on current reforms by enabling more private investment in infrastructure and freeing up public funds for investments in people’s education, health and social protection. This is according to a new World Bank report launched today in Cairo,‘’Egypt: Enabling Private Investment and Commercial Financing in Infrastructure’’, which calls for increasing the public funds available for building human capital by expanding successful energy reforms to other key sectors, such as transport, logistics, water and agriculture.

Egypt can learn from global experience and gain by increasing the use of private sector finance, management expertise and innovation in commercial infrastructure and agriculture, conserving public sector resources for where they are needed most”, said Clive Harris, Head for Maximizing Finance for Development for the World Bank.

Egypt is now beginning to reap the benefits of its transformative economic reform program. Macroeconomic stability and market confidence have been largely restored, growth has resumed, fiscal accounts are improving, and the public debt ratio is projected to fall for the first time in a decade.

Egypt has demonstrated that by having a package aimed at reducing economic risks, pursuing sector level reforms and well-prepared bankable projects, large scale foreign and domestic investment can be achieved, This is visible through the  US$ 2 billion invested in the largest solar park in the world, Benban, as well as US$ 13 billion in the Zohr field and other natural gas projects” said Ashish Khanna, Program Leader for Sustainable Development at the World Bank.

The report indicates that the action plan to further enabling private investment requires clear policy actions to resolve four cross cutting barriers to private investment – namely better management of land, transparency in Government procurement, efficiency in state owned enterprise and encouraging long term domestic financing. This needs to be complemented with developing projects for private investments with maximum economic impact, like the regional energy hub, logistics corridors, freight transport and agricultural transformation hubs.

The gains from reforms would also free up scarce public resources and allow for them to be re-allocated to investments in the education and health of Egyptians, the country’s human capital. Reforms in the energy sector provide an example of what is possible. The reform of energy subsidies freed up US$14 billon, reduced the pressure on the national budget and allowed the quadrupling of the investments in social safety net programs.

According to the report, for Egypt to maintain its reform momentum and focus on investing in its citizens, it will need to broaden and deepen its reform agenda to other sectors. This would be part of a fundamental shift away from the state as a provider of employment and output to an enabler of private investment; with the economy driven by a dynamic private sector generating jobs for the youth.

The report identifies four sectors which have huge potential for private investments and illustrates how successfully attracting those investments would generate growth, create jobs and ultimately contribute to developing Egypt’s human capital. The four sectors analyzed in the report are: transport, energy, water and sanitation, and agriculture.

The World Bank provides technical, analytical and financial support to help Egypt reduce poverty and boost shared prosperity. The focus of Bank support includes social safety nets, energy, transport, rural water and sanitation, irrigation, social housing, health care, job creation, and financing for micro and small enterprises. The World Bank currently has a portfolio of 16 projects with a total commitment of US$6.69 billion.

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New Initiative to Mitigate Risk for Global Solar Scale-up

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The World Bank and Agence Française de Développement (AFD) are developing a joint Global Solar Risk Mitigation Initiative (SRMI), an integrated approach to tackle policy, technical and financial issues associated with scaling up solar energy deployment, especially in some of the world’s poorest countries.

Initiated in Delhi at the first International Solar Alliance (ISA) summit in March 2018, the initiative will support the ISA’s goal to reduce costs and mobilize $1,000 billion in public and private investments to finance 1,000 GW of global solar capacity by 2030.

“The World Bank, in partnership with AFD, remains committed to the International Solar Alliance’s goals and to global efforts to fight climate change. Through this new, integrated approach, we hope to further scale up solar energy use by reducing the cost of financing for solar projects and de-risking them, especially in low-income countries,” said Riccardo Puliti, Senior Director of Energy and Extractives at the World Bank.

As the costs for solar power have fallen steadily, solar power is increasingly viewed as a key component in the fight against climate change. However, solar deployment has been slow in some emerging markets, particularly Africa, due to layers of risks perceived by the private sector in financing solar projects. The SRMI aims to change that.

“This partnership with ISA and the World Bank is another step towards achieving the objective of the Paris Agreement of redirecting financial flows in favor of low carbon and resilient development pathways.  AFD is glad to join forces with these partners to deliver on the commitments made at COP21, to bring solutions to de-risk potential solar investments and mobilize the private sector to invest in sustainable development” said Rémy RIOUX, CEO of AFD.

The SRMI’s integrated approach will include:

  • Support for the development of an enabling policy environment in targeted countries
  • A new digital procurement (e-tendering) platform to facilitate and streamline solar auctions
  • Targeting relatively small (under 20 MW) solar projects, offering a more comprehensive risk mitigation package of support to a wider range of investors and financiers to promote scale up at later stages. The financial risk mitigation package offered by SRMI will be supported by technical assistance and concerted engagement on planning, resource mapping and power sector reforms to ensure the creditworthiness of utilities in these countries
  • Mitigating the residual project’s risks through adequate risk mitigation financial instruments for both on and off-grid projects

The governments of India and France launched the ISA, an international organization as part of the Paris Climate Agreement in 2015 to scale up solar energy resources, reduce the cost of financing for solar projects around the world and ultimately help reach the Sustainable Development Goal on energy (SDG7) of providing access to affordable, reliable, sustainable and modern energy to all. To date, 71 countries have signed the constituting treaty of the ISA, and 48 have ratified it.

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