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
1The annual General Assembly session is expected to draw more world leaders than ever before. Pope Francis will speak at the U.N. on Friday morning before many heads of state even arrive. But the main event will come Monday when Obama, Putin, Chinese President Xi Jinping and other world leaders take turns on the podium to begin a debate on how to end Syria’s bloodletting, battle the violent extremist groups emerging from it and stem the flood of refugees and economic migrants flowing from it. At the center will be Putin, whom the West has tried to isolate for the last year for his aggressive support of armed separatists in eastern Ukraine. Paul Richter and Christi Parsons –Los Angeles Times
2Syria: As the West dithers, Putin makes his move. “As we have seen in Crimea and eastern Ukraine, Mr Putin is not shy about using military force when it suits his geo-political agenda. And with President Bashar al-Assad’s regime reportedly on the brink of collapse, the Russian leader has clearly decided that the deployment of Russian warplanes and armoured vehicles is vital to prevent the Syrian capital falling into the hands of Islamic State of Iraq and the Levant (Isil) militants, with all the implications that would have for the region” Telegraph
3Tehran continues its efforts on connection of Iranian Astara to the railway network of Azerbaijan. Oxu.Az reports with reference to the “News of the Caucasus” that the governor of the province of Gilan Mohammed Ali Najaf. According to him, the policy of the government of Iran is aimed at comprehensive development of the country in view of the potential of different regions. Speaking about the project for the construction of the railway Rasht – Astara, which is implemented by the order of the Iranian president, the governor pointed out that in this regard, Azerbaijan has agreed to extend its railroad to 8 km, which will allow to link its railway network to Astara. At that the improvement of customs service, sea port and special economic zone in Iranian Astara continues.
4Russia planning military drills in eastern Mediterranean. The Russian defence ministry on Thursday said it was conducting drills involving a guided missile cruiser in the eastern Mediterranean, which could be near the Syrian coast. Pre-empting possible questions about the sensitive timing of such manoeuvres, the ministry said Russia always holds an array of military drills at this time of the year and that the government approved the Mediterranean manoeuvres a year ago.
5Chessboard Strategy: Russia and UN Resolution 2117. “Two notable sectors were kept under government control: the energy and defense-related sectors. The purpose of this brief paper is to examine the current actions of Russian approaches to influence the transnational weapons market throughout the Caucasus, Central Asia, and the Middle East. This will be accomplished through critically analyzing Russia’s actions associated with U.N. resolution 2117, where it abstained from voting and honored instead an arms sale plan with Iran, shipping a modern-day missile-defense system, and a recent sale to Iraq that provided fighter jets for the fight against DAESH” ZR–Modern Diplomacy
6Here are the winners and losers of Iran’s return to the oil market. “Although the Iranian sanctions will probably only start to be lifted by spring next year, there is one nation particularly eager to see sanctions removed: South Africa.”We are definitely negotiating and looking at when to fully resume oil imports from Iran. For South Africa, if there’s a process of doing that lawfully, tomorrow we will do it, if there are no obstacles to that,” said Nomaindia Mfeketo, South Africa’s deputy foreign minister. As the second-largest economy on the continent, South Africa also has the highest rate of energy consumption. In the year 2014, South Africa imported close to 425,000 barrels of crude oil. Until 2011, Iran was South Africa’s largest supplier of crude oil, contributing around 25 percent of its total crude oil imports” Gaurav Agnihotri –OilPrice.com
7Azerbaijan has left Europe behind in the implementation of energy projects and launched the TANAP project, Turkish President Recep Tayyip Erdogan said Sept. 25. He made the remarks while answering questions of reporters, according to the Turkish TRT Haber TV channel.Erdogan went on to add that while Europe remained inactive regarding the Nabucco project, Azerbaijan has successfully launched the TANAP project in which Turkey has its share as well.
8Leaving the Euronest: Why Azerbaijan is Unhappy. “When the Euronest decided to hold the 2015 session in Armenia, it left Azerbaijan feeling like it had no place within the assembly. Azerbaijan did not understand how the Euronest would claim such atrocities committed by the Azeris while turning a blind eye toward the Armenians’ bad behavior and even giving them a great honor by holding the next session in their state” Dayna Rice –Modern Diplomacy
9Kazakhstan’s oil dreams. “Just a few years ago, Kazakhstan had ambitious plans to join the world top ten oil-producing countries. However, it seems that these plans are destined to remain unfulfilled. At present, oil production is not expected to be increased in the country. On the contrary, for several consecutive years, oil production has been slowly but steadily falling in Kazakhstan” Elena Kosolapova –Trend.
10The world’s largest gas-chemical complex is being constructed in the territory of the Derveze District of Turkmenistan’s Akhal province.The facility, equipped with the latest technologies from the famous Danish Haldor Topsoe Company, will annually recycle 1.782 billion cubic meters of natural gas and produce 600,000 tons of gasoline of the A-92 brand, which will meet the ecological requirements of the Euro-5 standard.The commissioning of the complex in 2018 will create about 800 new jobs, according to Turkmen media.The construction of the complex is being conducted by Turkmenistan’s State Concern Turkmengaz and a consortium created by the Japanese Kawasaki Company and Turkish Rönesans Holding.
New ADB Platform to Help Boost Financing for Climate Action
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 $80 billion from its own sources between 2019 and 2030.
Egypt: Shifting Public Funds from Infrastructure to Investing in People
Egypt has an opportunity to capitalize on current reforms by enabling more private investment in infrastructure and freeing up public funds for investments in people’s education, health and social protection. This is according to a new World Bank report launched today in Cairo,‘’Egypt: Enabling Private Investment and Commercial Financing in Infrastructure’’, which calls for increasing the public funds available for building human capital by expanding successful energy reforms to other key sectors, such as transport, logistics, water and agriculture.
“Egypt can learn from global experience and gain by increasing the use of private sector finance, management expertise and innovation in commercial infrastructure and agriculture, conserving public sector resources for where they are needed most”, said Clive Harris, Head for Maximizing Finance for Development for the World Bank.
Egypt is now beginning to reap the benefits of its transformative economic reform program. Macroeconomic stability and market confidence have been largely restored, growth has resumed, fiscal accounts are improving, and the public debt ratio is projected to fall for the first time in a decade.
“Egypt has demonstrated that by having a package aimed at reducing economic risks, pursuing sector level reforms and well-prepared bankable projects, large scale foreign and domestic investment can be achieved, This is visible through the US$ 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.
New Initiative to Mitigate Risk for Global Solar Scale-up
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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