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Europe in crisis: everyone from Putin to ordinary savers are stockpiling gold

Dimitris Giannakopoulos

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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

1European investors snapped up gold bars and coins at a rapid pace in the second quarter as turmoil in Greece threatened to push the country out of the eurozone.The World Gold Council (WGC) said demand in Europe for the precious metal rose sharply in the three months to June compared with the same quarter last year amid rapid buying of bullion, even as global demand fell by 12pc to a six-year low of 915 tonnes. Szu Ping Chan for the telegraph.

2Switzerland Lifts Sanctions On Iranian Oil, Precious Metals Sales. Switzerland is lifting some sanctions against Iran in what it calls a sign of support for the agreement between Tehran and world powers over its nuclear program. The neutral country’s governing Federal Council decided on August 12 to lift a ban on precious-metals transactions with Iranian state entities, and end requirements to report trade in Iranian petrochemical products and transport of Iranian crude oil, among other measures.The government, which also cited its “interest in deepening bilateral relations with Iran,” said it reserves the right to reimpose the sanctions if implementation of the nuclear deal fails.

3At least nine foreign national leaders, including Russian President Vladimir Putin, have confirmed they will attend Beijing’s military parade to mark the 70th anniversary of victory in the War of Resistance against Japanese Aggression (1937-45), media reports say. South Korean President Park Geun-hye will announce her decision no later than next week, her spokesman said. The leaders of Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan – all members of the Shanghai Cooperation Organisation – have confirmed they will come to Beijing for the celebration.

4Greece and Azerbaijan discussed the sale of a package of shares of DESFA gas transportation system operator to SOCAR.This issue was discussed at a meeting of Greek Minister Panos Skurletis with SOCAR Energy SA Greece director general Anar Mammadov, the ministry of industrial reform, environmental protection and energy of Greece said. During the meeting the minister stressed the positive attitude of the government in the field of energy cooperation with Azerbaijan. The sides reviewed the technical issues and agreed to hold a meeting soon to discuss and resolve the remaining issues to intensify the further actions that will allow beginning the design work for TAP in Greece.

5Whither Azerbaijan’s Islamists? The overall atmosphere in Azerbaijan is grim when it comes to freedom of speech and freedom of conscience. Yet, the release from prison of Taleh Baghirov, a young, charismatic Shia Muslim cleric, goes against the general trend in Azerbaijan. While it is certainly premature to call Baghirov’s release a “game changer,” it has implications for Azerbaijan’s Islamist politics that are worth pondering. [Eurasianet]

6Turkmenistan’s national gas company TurkmenGaz has agreed to acquire a 51% stake in the proposed $10bn Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline project.StateTAPI is a consortium formed by the state-owned gas companies of the four countries to manage the project.Other partners in the project include Afghan Gas Enterprise, Pakistan-based Inter State Gas Systems and Gail (India).The consortium leader is expected to be selected in September and construction on the project would begin in December.

7US general: Russia main threat for USA.Russia is among the most dangerous countries for the United States, US army chief of staff, general Raymond Odierno said.at a briefing in Pentagon.”I think Russia is most dangerous for a number of reasons. Primarily because it is better prepared than our other potential opponents”, the general believes.In particular, Russia ‘has serious potential for holding really complex operations in Ukraine”, he says.In this connection, Odierno finds it essential to expand the military potential of NATO-led troops in Eastern Europe.

8Development of the largest natural gas field in Turkmenistan, Galkynysh, continues, according to the newspaper “Neutral Turkmenistan.”More than 20 production wells have been drilled during the preparation for the launch of refining capacities in the central part of the oil and gas area of the field. In 2014, the departments of Turkmen state concern “Turkmenraz” completed construction of three production wells with a depth of over 4,500 meters with a total flow rate of more than 6.5 million cubic meters of natural gas per day. Teams of the “Turkmengeologiya” State Corporation commissioned three more wells. This year, geologists plan to drill another four deep wells with high flow rate of gas on the field.

9A nuclear guide to the Kazakhstan Steppe. The Soviet Union’s rise and fall as a superpower has left a toxic legacy on a large corner of the planet. Semipalatinsk Test Site or simply “The Polygon” is an 18,000-square-kilometre area on the Kazakh Steppe where the Soviet Union conducted 456 nuclear tests before the site was officially closed for testing in 1991.Today the Polygon is home to research on the effects of the tests on the surrounding ecology. And it’s also open for tours.Fifty years ago intruders would have been shot on sight. Now tourists are doing the shooting through viewfinders. [ABCnews]

10Azerbaijan will take part in the sessions of the commission on regulation of use of radio frequency spectrum and satellite orbits RRU (Regional Communication Union) and working group on preparations for the World radio frequency conference from September 7 to September 11 in Moscow.

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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