Welcome to the Caspian Daily, where you will find the 10 most important things you need to know on Caspian Sea Region. We appreciate ideas, reports, news and interesting articles. Send along to Caspian[at]moderndiplomacy.eu or on Twitter: @DGiannakopoulos
1World powers have reached a deal with Iran on limiting Iranian nuclear activity in return for the lifting of international economic sanctions.US President Barack Obama said that with the deal, “every pathway to a nuclear weapon is cut off” for Iran. His Iranian counterpart, Hassan Rouhani, said it opened a “new chapter” in Iran’s relations with the world. The accord will keep Iran from producing enough material for a nuclear weapon for at least 10 years and impose new provisions for inspections of Iranian facilities, including military sites. And it marks a dramatic break from decades of animosity between the United States and Iran, countries that alternatively call each other the “leading state sponsor of terrorism” and the “the Great Satan.” The breakthrough came after several key compromises. Diplomats said Iran agreed to the continuation of a UN arms embargo on the country for up to five more years, though it could end earlier if the International Atomic Energy Agency definitively clears Iran of any current work on nuclear weapons. A similar condition was put on UN restrictions on the transfer of ballistic missile technology to Tehran, which could last for up to eight more years.
2The Fate of the Turkish Stream Pipeline after the 7 June Elections in Turkey. “Russia and Turkey move closer together over the last 10 years may experience a slowdown. The increased political risks accompanied on the one hand by a rapidly changing political situation and on the other by Russia’s strategic interests and Moscow’s updated energy policy, are making their mark on the implementation of the Turkish Stream pipeline. It may therefore be helpful to classify the main political risks for Ankara under the headings of “internal” and “external” writes Kerim Has for RIAC.
3US ambassador: Azerbaijan is the example of tolerance. Since arriving in Azerbaijan, I have learned about many things Azerbaijan can offer to the world. One such thing is the example of tolerance and the history of people of different religions living together and respecting each other, the US ambassador to Azerbaijan Robert Cekuta told during iftar ceremony on the occasion of the holy month of Ramadan at his residency. He also mentioned that today 2.6 million Muslims live in the United States. US value friendship with the countries of the Muslim world and wish to expand these ties.
4Kazakhstan: Economic Crisis, State Companies, And The Nation’s Image. “Due to Kazakhstan’s close economic relationship with Russia, and the country’s dependence on oil exports, which accounted for 70 percent of 2014’s exports, Kazakhstan’s economy has been one of the hardest hit in Central Asia. The government has already been forced to revise the budget twice since last year, first to refigure finances based on oil being $80 per barrel, then again early in 2015 to base the budget on the price of oil being $50 per barrel. In February 2015, the government warned that 120,000 workers could be laid off due to economic difficulties” writes Qishloq Ovozi for RFE/RL.
5Turkmenistan sees growth in oil production. Oil production in Turkmenistan has increased by 7.8 percent in Jan.-June 2015, compared to the same period of 2014, the country’s Ministry of Oil and Gas Industry and Mineral Resources said July 13. Positive changes have been observed in many spheres of economy in H1 of 2015, according to the ministry.During the reporting period, gasoline production has increased by 1.1 percent, kerosene – 0.2 percent, oil bitumen – 19.8 percent, petroleum coke – 0.2 percent, liquefied gas – 0.5 percent, polypropylene – 0.2 percent.Turkmenistan plans to bring the capacity of the refining industry to 20 million metric tons of oil by 2020, 22 million metric tons by 2025 and 30 million metric tons by 2030.
6Cossacks Seek Greater Role in Southern Russia’s Economic and Political Life. “On June 26, the ideologue of free Cossakia Grigory Kuznetsov (a. k. a. Vladlen Alyabyev), reiterated his vision of an independent Cossack territorial entity in a brief manifesto. The Cossack leader did not explicitly state that Cossakia should seek independence from the Russian Federation, but strongly suggested the need to explore this route. Cossacks should have their own “national leaders who are elected at the Cossack Council and who depend on the choice of the nation, not on the decrees of the aliens from the bordering state,” the activist wrote” writes Valery Dzutsev for the Jamestown.
7China may replace Russia as gas partner for Turkmenistan. Much of Turkmenistan’s future stability will hinge on the specific partner that will replace Gazprom, who was recently declared by the Central Asian country as an insolvent one, Luca Anceschi, lecturer at the British University of Glasgow believes.“Much of Turkmenistan’s future stability will hinge on the specific partner that will replace Gazprom. It might be China, but I think that it is in the interest of the Turkmen government to finalise as soon as possible a new set of energy deals with other partners, located in both Asia and the West,” Anceschi told Trend.az on July 13. Recently Turkmenistan said that Russia’s Gazprom has become insolvent on its contracts for sale and purchase of natural gas due to the ongoing world economic crisis and the economic sanctions imposed on Russia by the West.
8General Tanasak Patimapragorn, Deputy Prime Minister and Minister of Foreign Affairs of Thailand, begins an official visit to Russia on July 14. Patimapragorn will participate in the Sixth Meeting of the Thai-Russia Joint Commission on Bilateral Cooperation, which will be held on July 15 in Moscow. The Russian part of the Commission is headed by Minister of Industry and Trade of Russia Denis Manturov. Barsky said that several new agreements are planned to be reached during the visit, and some documents may be signed in the areas of agriculture, customs, and environmental protection.
9New Market Research Report: Herbal Traditional Products in Azerbaijan. Traditional herbal therapy is a strong part of Azerbaijani culture. More often people turn to herbal/traditional products or products with such positioning as they are perceived as being gentle and less harmful than standard products. Although these remedies are mostly consumed to eliminate minor symptoms they are gaining more popularity thanks to the growing belief that most OTC’s cause addiction. Finally in some cases the price of such remedies is more accessible and thus remains an. Euromonitor International’s Herbal/Traditional Products in Azerbaijan report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data 2010-2014 allowing you to identify the sectors driving growth. Forecasts to 2019 illustrate how the market is set to change. [Euromonitor]
10Azerbaijan among most travel-worthy countries. Azerbaijan, which is turning into one of the most popular tourist destinations in the world, is listed among the countries for the “National Geographic Traveler Awards 2015” contest. The competition, conducted by National Geographic Magazine, is being held to determine the best tourist destinations of 2015 by a range of popular leisure activities.
World Bank Financing to Help Kazakhstan Unleash Full Potential of its Livestock Industry
The World Bank Board of Executive Directors approved today a $500 million loan for the Sustainable Livestock Development Program to support the development of environmentally sustainable, inclusive, and competitive beef production in Kazakhstan.
The program financing will support Kazakhstan’s state Agro-Industrial Complex Development program in improving veterinary services and animal recording systems, scaling-up a farmer-centric service delivery model, and improving agro-environmental policies for the sector.
Over a period of five years, the program aims to achieve a 10 percent increase in the share of public expenditure for sustainable beef production and processing, and a three-fold increase in the value of beef exports. In addition, around 20,000 small and medium farmers will be connected to export value chains.
“We are very happy to support Kazakhstan in developing its high-value export-oriented beef sector,” said Jean-Francois Marteau, World Bank’s Country Manager for Kazakhstan. “The country has a huge natural potential and favorable geographic position, which are conducive to export-oriented beef sector development. These can be utilized to benefit Kazakhstan’s long-term economic development goals, namely, diversification of exports and improving rural livelihoods. The Program is particularly important in a COVID-19 environment which is affecting employment countrywide.”
An export-oriented, high-value beef sector provides an opportunity for Kazakhstan to achieve its national development objectives, by mobilizing significant investments from domestic and foreign agribusiness firms and expansion of production by small and medium farmers.
A potentially competitive expanded resource base and geographical proximity to important consumer markets will also help attract private investment in meat processing, packaging, and logistics companies to Kazakhstan.
The program will promote green growth and sustainability policies aimed at promoting climate-smart practices for beef cattle production, reducing greenhouse gas emissions and improving the overall agri-environmental outcomes of the government’s beef sector support programs.
The five-year (2021-2025) implementation of the Sustainable Livestock Development Program for Results will be financed through a $500 million IBRD loan, which will be disbursed on the basis of Program-for-Results (PforR) – a financing instrument that links the disbursement of funds directly to the achievement of specific program results.
Turkey’s Rail Connectivity and Logistics will Improve with World Bank Financing
The World Bank’s Board of Executive Directors today approved a loan in the amount of EUR 314.5 million ($350 million equivalent) for the Turkey Rail Logistics Improvement Project. The project aims to reduce transport costs in selected rail freight corridors and to strengthen institutional capacity at the Turkish Ministry of Transport and Infrastructure (MoTI) to deliver rail freight connectivity and manage rail-enabled logistics centers.
The project will support delivery of last-mile rail and multimodal connectivity infrastructure at well-prioritized nodes of Turkey’s national railway network. These interventions will help revitalize the transport and logistics sector, and by extension, contribute to the sustainability of the cargo owners operating supply-chains in the project’s target corridors in the aftermath of the COVID-19 pandemic.
“Despite having economic geography and commodity specialization characteristics that are in-principle favorable to the use of rail freight, rail accounts for only 4% of Turkey’s transported tonnage, leaving a large share of freight to be moved by road. This leaves significant economic value on the table in terms of avoidable logistics costs and environmental externalities,” says Auguste Kouame, World Bank Country Director for Turkey. “The project’s investments will contribute towards more fully realizing rail freight’s potential in Turkey.”
The project will be implemented by the Ministry of Transport and Infrastructure’s (MoTI), and has three components:
Component 1 includes construction of railway branch lines and multimodal connections at priority network nodes, including Filyos Port, Çukurova Region Industrial Zones, Iskenderun Bay Maritime Ports, and at additional priority sites to be selected during implementation;
Component 2 includes feasibility studies, detailed engineering designs, environmental and social documentation, and construction supervision for rail last-mile connectivity infrastructure at additional freight nodes;
Component 3 focuses on Phase 2 COVID-19 response support, institutional strengthening, capacity building, and project implementation support, including technical assistance on uniformization of rail technical standards across the national rail network, support in preparation of a strategy document for rail freight sector performance improvement, and support to Turkish State Railways through development of an operational and management model for rail-enabled logistics centers.
“Strengthened management and decision-making capacity at MoTI to promote multimodality, expand the use of rail freight, and improve the quality of rail freight services nationally will be the other benefits,” remarked Murad Gürmeriç and Luis Blancas, Task Team Leaders of the Project. “The project is expected to reduce transport costs, reduce emissions of greenhouse gases (GHGs) and local pollutants, and increased share of rail in the freight transport task of the corridors targeted by the project.”
The project is aligned with Turkey’s Country Partnership Framework (CPF) for FY18-FY21, which focuses on the three strategic objectives of growth, inclusion, and sustainability.The project will contribute to the growth focus area which has the objective of enhancing the competitiveness of selected industries. The project is also aligned with the WBG approach to supporting client countries in mitigating the impact of COVID-19 on their economies, firms and workers.
The impact assessment envisioned in Component 3 of this project will help mitigate the impacts of COVID-19 by supporting MoTI in diagnosing the medium- and long-term impacts of COVID-19 on multi-modal logistics of both the demand and supply sides, and helping design public, public-private, and/or private interventions – including interventions aimed at tackling behavioral and occupational aspects of risk prevention.
Second phase of the Nurek Hydropower Rehabilitation Project in Tajikistan
The World Bank’s Board of Executive Directors approved additional grant financing of $50 million from the International Development Association (IDA) for the second phase of the Nurek Hydropower Rehabilitation Project in Tajikistan. The Nurek Hydropower Plant (HPP) is the most important asset of Tajikistan’s energy system.
“The restoration of the generation capacity of the Nurek HPP is essential for ensuring energy security for the people of Tajikistan,” said Jan-Peter Olters, World Bank Country Manager in Tajikistan. “Especially in these difficult times, the combination of inherent climate benefits from this renewable source of energy and the ability to support job creation and incomes for the local population, including by their engagement in this large-scale rehabilitation process, makes this a critical investment for a fast and sustainable post-crisis recovery.”
The Nurek HPP, with an installed capacity of over 3,000 megawatts, generates about 50 percent of total annual energy demanded in Tajikistan. Operational at currently about three-quarter of its installed generation capacity, the HPP is undergoing its first major rehabilitation since its commissioning in 1972. Once completed, the rehabilitation will allow the Nurek HPP to increase electricity generation by about 300 million kWh, supporting the Government’s efforts to ensure that energy demand can be met even during the cold winter months.
At the same time, during summer, Tajikistan would be in a position to expand electricity exports from its hydro resources, including through the CASA-1000 transmission line and upon synchronization of the country’s electricity network with Central Asian Power System (CAPS). This would generate much-needed additional revenues for the sustainability of the power sector, thereby reducing pressures on the pace of tariff adjustments.
The first phase of the Nurek Hydropower Rehabilitation Project, financed by the World Bank ($225.7 million), the Asian Infrastructure Investment Bank ($60 million) and the Eurasian Development Bank ($40 million), was launched in March 2019. It has focused on rehabilitating three of the nine generating units, replacing and refurbishing hydromechanical equipment and the key infrastructural components of the power plant, replacing six auto-transformers that are used to evacuate the generated electricity, and enhancing dam safety with a special focus on protection against seismic hazards and floods.
Through a separate project, the World Bank is supporting Government’s efforts in strengthening the institutional capacity and financial viability of the open joint stock holding company Barqi Tojik (BT).
The project’s second phase will finance the rehabilitation of the remaining six generating units, the Nurek bridge, the powerhouse, and other key buildings, while strengthening the HPP’s capacity to operate and maintain the power plant.
Capacity building will be provided to Nurek HPP and BT to enhance dam safety monitoring and the operation and management of hydro facilities. With a total cost of $192 million for the project’s second phase, the Government of Tajikistan is currently finalizing its discussions with other development partners to secure the required additional resources.
Given Tajikistan’s long history of power outages, particularly during the cold winter months, the climate co-benefits, and the socio-economic development impact of using available hydro resources effectively, Tajikistan’s energy sector has been a priority area of engagement for the World Bank. Its current energy-related investments exceed $530 million.
These investments aim at supporting the sector’s sustainability, eliminating seasonal energy rationing, ensuring an affordable and stable electricity supply to families and businesses and much needed revenues from increased export of clean, non-fossil energy resources.
The World Bank Group’s active portfolio in Tajikistan includes 21 projects, totaling US$938 million that aim at helping Tajikistan to take advantage of emerging regional opportunities, transform its economy and improve the livelihoods of its citizens. Since 1996, the World Bank has provided US$1.9 billion in grants, highly concessional IDA credits, and trust fund resources.
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