Table of Content Production ...... 27 Fish farms ...... 28 Processing capacity ...... 29 1. Azerbaijan ...... 2 Trade ...... 30 Aviation Sector ...... 2 Workforces in the sector ...... 31 Development Opportunities in the Airport ...... 2 Potential water resources for fisheries ...... 32 Airlines ...... 3 Development Plans ...... 32 CIS Countries Passengers ...... 3 Prospects of fisheries sector ...... 33 Cargos ...... 4 Related Tender Held ...... 34 First Draft Fleets ...... 5 Key players (Public and private sectors) ...... 34 Workforces in the Aviation sector ...... 6 Forestry Management ...... 35 Nominal Wages in the Aviation sector ...... 6 Size of the sector ...... 35 Development Plans in the Aviation sector ...... 7 Total forest area (natural & man-made) ...... 35 Prospects of Aviation Sector ...... 7 Environmental protection policies ...... 37 Key players in the Aviation sector ...... 8 Workforces in the sector ...... 39 Water Treatment ...... 9 Development Plans ...... 39 Water treatment facilities and their capacity ...... 9 Prospects of forestry management sector...... 39 Development Plans ...... 11 Key players (Public and private sectors) .... 40 Prospects of Water Treatment Sector Error! Bookmark not defined. Territory Planning ...... 42 Related Tenders Held ...... 11 Prospects of Territory Planning ...... 42 Key players ...... 11 Investment Made in Territory Planning ...... 44 Key players (Public and private sectors) ...... 45 Waste Management ...... 12 August 2019 Size of waste management Sector ...... 12 Rural Development ...... 46 Methods of waste disposal used in Azerbaijan ...... 14 The rural area...... 46 Main waste disposal Facilities ...... 15 Population in the rural area ...... 46 Prospects of waste management...... 17 Rural development policies ...... 47 Key Players ...... 17 Prospects of rural Development ...... 48 Water Management and Supply ...... 18 Related Tenders held ...... 49 Main dams and their capacity ...... 19 Key players ...... 49 Precipitation ...... 20 Renewable Energy (wind & solar) ...... 50 Water Consumption in various sector ...... 20 Size of the sector ...... 50 Main water supply sources ...... 21 Renewable energy development policies ...... 51 Development Plans ...... 22 The share of renewable energy as total energy produced Prospects of water management sector ...... 23 ...... 52 Related Tenders Held ...... 24 Common Finance methods in the sector ...... 53 Key players (Public and private sectors) ...... 24 Development Plans ...... 53 Fisheries ...... 25 Key players (Public and private sectors) .... 55 Size of the sector ...... 25 Main fishery resources...... 26 Available aquatic species ...... 26

Seperator:

Azerbaijan

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1. Azerbaijan Map 1-1: Connec tivity Map-2011

Aviation Sector

Air transport to, from and within Azerbaijan creates three distinct types of economic benefit. Economic value created by the industry is more than contribution to GDP. The principal benefits are created for the customer,

the passenger or shipper, using the air transport service. In addition, the connections created between cities and markets represent an important infrastructure asset that generates benefits through enabling foreign direct investment, business clusters, specialization and other spill-over Source: IATA impacts on an economy’s productive capacity. Table 1-1: Azerbaijan Commercial Airports Airport Airport City ICAO Code Akstafa Aghstafa UBBA Currently, there are 11 commercial

airports in Azerbaijan. Heydar Aliyev Internaonal Airport Baku UBBB Zabrat Airport Baku UBTT Heydar Aliyev International airport has Balakan Airport Balakan UB0G

considered largest airport in the Ganja International Airport Ganja UBBG country. Lankaran International Airp ort Lankaran UBBL Nakhchivan International Airport Nakhchivan UBBN

Qabala International Airport Qabala UBBQ Stepanakert Airport Stepanakert UBBS

Yevlakh Airport Yevlakh UBEE Zaqatala International Airport Zaqatala UBBY 2 | Page

Airlines Currently there are 6 airlines active in Table 1-2: Active Airlines in Azerbaijan

Azerbaijan which Azal avia cargo and Airline Fleets Size Number of Destinations silk way airlines are only cargo airlines. Azerbiajan Airlines 20 36 Buta Airways 8 18 Azerbaijan airlines with fleet size of 20 SW Business Aviation 7 - aircraft is the biggest airlines in the country. Azal Avia Cargo 4 - Silk Way Airlines 24 49 Passengers Table 1-3: Passeng ers Conveyance by Air In 2017, more than 2.3 million passengers were conveyed which 20 13 2014 2015 2016 2017 CAGR shows CAGR of 7 percent during years Passenger сonveyance (000 passenger) 1,664 1,788 1,818 1,980 2,359 7% 2013 to 2017. International (000 passenger) 1,1 57 1,236 1,284 1,432 1,770 9% Local (000 passenger) 507 552 534 548 589 3% Passenger turnover (million passenger-km) 2,5 79 2,918 3,338 3,549 5,601 17% International (million passenger-km) 2,286 2,589 2,986 3,185 5,198 18%

Local (million passenger-km) 293 329 352 364 403 7% Source: State Statistical Committee of Azerbaijan

Chart 1-1: Passengers Turnover Chart 1-2: Passengers Conveyance by Air

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Cargos Table 1-4: Goods Trans portation by Air in 2017, about 173 thousand ton of cargo transported via air transportation. 2013 2014 2015 2016 2017 CAGR These statistics show CAGR of 7 Good s transportation (thousand tonnes) 126 125 129 160 173 7% percent during years 2013 to 2017. international 124 123 127 158 171 7% local 2 2 2 2 2 0%

Turnover of goods (million tonne-km) 443 481 582 683 738 11% international 442 480 581 682 737 11%

local 1 1 1 1 1 0%

Source: State Statistical Committee of Azerbaijan

Chart 1-3: Goods Transportation Chart 1-4: Turnover of Goods Transported via Air

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Fleets Table 1-5: Number of Fleets

Currently, there are 22 active aircraft in the Azerbaijan air transport fleet including Airbus A319, Airbus A320,

Airbus A340, Boeing 757, Boeing 767, Boeing 787 and Embraer 190.

Source: Airfleets.net

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Workforces in the Aviation sector Table 1-6: Average annual number of workers in the Air transport enterprises In 2017, about 12,409 people worked in the Air transport enterprises. The 2013 2014 2015 2016 2017 CAGR statistics show CAGR of 2 percent Number of workers 11,029 12,083 12,451 12,150 12,409 2% during years 2013 to 2017. Source: State Statistical Committee of Azerbaijan Nominal Wages in the Aviation sector Average nominal wages of workers in Table 1-7: Average nominal wages of workers in the Air transport enterprises (US Dollar) the Air transport enterprises was about 613 US Dollars in 2017 that shows 2013 2014 2015 2016 2017 CAGR CAGR of 5 percent during years 2013 No minal wages 492 466 483 500 613 5% to 2017. Source: State Statistical Committee of Azerbaijan

Chart 1-5: Average annual number of workers Chart 1-6: Average nominal wages of workers

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Development Plans in the Aviation Heydar Aliyev international airport and convention is administrated by sector a free economic zone established here. International Civil Aviation Organization Further measures will be taken to (ICAO), an entity of the United Nation. For Azerbaijan to become a regional renew the six other international ICAO Assembly Resolution A36-23 trade center, the country’s strategic airports and the air fleet. resolved that each state to develop a geographical location must be national PBN implementation plan. effectively used, transit and transport Azerbaijan’s national carrier AZAL Azerbaijan Republic Performance services developed, and logistical (Azerbaijan Airlines) has announced Based Navigation (PBN) centers established in the districts. This plans to significantly expand its Implementation plan details the will also enhance the country’s international network by introducing framework within which the ICAO PBN attractiveness as a reduction and more than 14 new routes from its Baku concept will be implemented in the investment center and open new hub, including Tokyo, Delhi, Shanghai, Azerbaijan for the foreseeable future. business and employment Zhengzhou, Bangkok, Seoul, Kuala Azerbaijan Republic Performance opportunities. Lumpur, Amsterdam, Vienna, Rome, Based Navigation (PBN) Amman, Karachi, Cairo, Dushanbe Implementation plan is guided by ICAO The management of local and “and other large cities. Doc. international transport will be improved and the integration of the country’s The government has also committed to · INTENT OF THE AZERBAIJAN transport into the international system developing a dedicated low-cost carrier PBN IMPLEMENTATION PLAN expanded. Accordingly, a new unified as a facilitator in driving up tourist strategic approach will be applied to inflows and sector-related revenue by automobile, railway, water, air and The PBN Implementation Plan was 50% by 2020. As such, Buta Airways developed by the Azerbaijan CAA in underground transport. (J2, Baku) is expected to launch using consultation with the stakeholders a fleet of its own Embraer aircraft. concerned and is intended to assist the In order to enhance the country’s main stakeholders of the aviation competitiveness in the Europe- Prospects of Aviation Sector community plan a gradual transition to Caucasus-Asia and North-South the RNAV and RNP concepts. The international transit corridors, with the help of the new routes, main stakeholders of the aviation measures will be taken to reduce transit passenger traffic through Heydar Aliyev community that benefit from this PBN costs via Azerbaijani territory, expedite International Airport should exceed Implementation Plan, and were import and export operations, shorten seven million passengers a year by the therefore included in the development transit time and simplify transit end of 2020. process are: procedures. Azerbaijan is signatory of the A new airport terminal, a runway and Convention of International Civil · Airspace operators and users hangars will be commissioned at the Aviation; the Chicago Convention. The

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· Azerbaijan Air navigation service Presidential Decree №1785 dated 12 provider - AZANS January 2018 “On certain measures to · Azerbaijan Civil Aviation improve management in the field of Administration transport, communications and high technologies in Azerbaijan”. The total · National and international number of Agency’s personnel is 48. organizations The expenses for maintenance and The Azerbaijan PBN Implementation Agency’s activities are funded from the Plan is intended to assist the main State budget of the Republic of stakeholders of the aviation community Azerbaijan. The Agency’s activity is plan the future transition and their headed by a director, who may be investment strategies. For example, appointed and dismissed by the airlines and operators can use this President of the Republic of Azerbaijan.

Azerbaijan PBN Implementation Plan to At present the director of the State Civil plan future equipage and additional Aviation Agency is Arif Mammadov navigation capability investments; air Ahmad oglu. The director of the Agency navigation service providers can plan a has two deputy directors. gradual transition from ground 2- Silk Way West is a subsidiary of infrastructure to space based Silk Way Company, which includes 23 Navigation. companies operating in the aviation Azerbaijan Civil Aviation industry and related services. Administration will be able to anticipate and plan for the criteria that will be needed in the future as well as the future regulatory workload and associated training requirements for their work force.

Key players in the Aviation sector

1- The State Civil Aviation Agency

under the Ministry of Transport, Communications and High

Technologies of the Republic of

Azerbaijan was established by

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Water Treatment to piped water supply. While coverage deferred maintenance. In many appeared generally high in comparison secondary and small towns, water In the sewerage sector, Baku to most of the other countries with treatment facilities were largely wastewater network serves 72% similar income, the quality of dysfunctional or lacking completely, so population of the city, but only 50% of infrastructure and services had that the population in these towns did the water is treated. 90% of the treated deteriorated severely over the years not have access to safe water supply. water is biologically processed and only due to the lack of investment and In addition, almost everywhere in the 10% is mechanically processed. deferred maintenance. In many country piped water supply was Wastewater treatment plants are secondary and small towns, water unreliable and often only available for available in 16 cities and regions; most treatment facilities were largely less than 12 hours a day. Centralized of them are partially or completely dysfunctional or lacking completely, so piped water supply systems were rare useless. In most cases, the quality of that the population in these towns did in rural areas and less than 33 percent water supplied to the population does not have access to safe water supply. of the rural population had access to not meet the required standards. The In addition, almost everywhere in the piped water supplies. state works with donor communities to country piped water supply was take the necessary measures to unreliable and often only available for A combination of an inherited and address these problems. The less than 12 hours a day. Centralized relatively extensive water supply Azerbaijani government has adopted a piped water supply systems were rare system from the Former Soviet Union program on the construction of water in rural areas and less than 33 percent (FSU), lack of investment, deferred supply and sewage systems in more of the rural population had access to maintenance and damage due to than 60 small towns (regional centers) piped water supplies. natural calamities such as an in the country. The state has already earthquake in 2000 with an epicenter started to implement more than 20 such Azerbaijan inherited a relatively just offshore Baku that was the projects. At the same time, local water extensive water supply system from the strongest in almost 160 years, resulted supply projects are being implemented. Former Soviet Union (FSU). At the time in severely deteriorated quality of of the appraisal, about 95 percent of the infrastructure and services over the Water treatment facilities and their population in Baku and about 83 years. The compounded impact of capacity percent of those living in secondary these developments negatively affected water supply and sanitation Azerbaijan inherited a relatively cities and small towns were connected to piped water supply. While coverage users. In many secondary and small extensive water supply system from the towns, water treatment facilities were Former Soviet Union (FSU). At the time appeared generally high in comparison to most of the other countries with largely dysfunctional or lacking of the appraisal, about 95 percent of the completely, to the point that the population in Baku and about 83 similar income, the quality of infrastructure and services had population in these towns did not have percent of those living in secondary access to safe water supply. cities and small towns were connected deteriorated severely over the years due to the lack of investment and Furthermore, most rayons did not have

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a functioning sewerage collection imperative that fecal sludge from these Azersu controls 18,000 kilometers of system, and the few facilities that were facilities be treated before it is water transmission lines and 3,500 available were in a poor state of discharged into the environment both kilometers of sewer and stormwater disrepair. This was a serious threat to for public health and environmental lines. public health and had severe negative reasons. impacts on the environment. In addition, almost everywhere in the Potable water supply and sanitation country piped water supply was services in Azerbaijan are centrally unreliable and was often available for managed by Azersu JSC. The less than 12 hours a day. company is responsible for taking water from the sources, processing, About 55 percent of Azerbaijan’s transporting and distributing of water, population had access to improved and purifying wastewater. Azersu also sanitation facilities. Access to deal with designing water intake sanitation facilities in urban areas was structures, reservoirs, pumping higher than in rural areas, with stations, water pipelines, sewage coverage estimated at 73 percent and collectors, and their construction, 36 percent, respectively. The operation and maintenance. sewerage network in Baku served about 78 percent of the population, Table 1-8: Water treatment plants although only about 50 percent of wastewater in the area was treated. capacity Sewerage coverage in other urban Plant name areas was only about 32 percent and a (m3/ day) minor proportion of the sewage Hovsan biological treatment plan ts 640,000 underwent any treatment before disposal. Rural areas primarily Sahil biological treatment plants 17,500 depended on on-site sanitation. There Buzovna biological treatment plants 10,000 was insufficient control by the public Zig mechanical treatment facilities 70,000 health department on the location and Khojassan mechanical treatment facility 18,600 condition of on-site sanitation facilities, and there was no effective regulation of Shuvelan mechanical treatment facilities 18,600 the emptying trucks which periodically Total 774,700 removed the sludge, increasing the risk of clandestine and unsafe discharge of Source: azersu.az this matter into the environment. It was

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Water supply Baku city and Absheron Currently, there are six Wastewater Related Tenders Held peninsula is fulfilled from 3-5 Treatment Plants in Azerbaijan. underground and 2 surface water The Republic of Azerbaijan has received financing proceeds from the sources: 2 underground water sources Development Plans located in Khachmaz, the underground Islamic Development Bank (IDB) water source of Oghuz, and The share of Azerbaijan’s urban towards the cost of implementing the Jeyranbatan reservoir, as well as Kura population has increased in the past National Water Supply and Sanitation River. Drinking water is delivered to decade. The urbanization trend is Project. It is intended that part of the Baku through Shollar and Second Baku expected to continue in the years proceeds will be applied to eligible waterlines from Khachmaz, waterlines ahead, which sets forth new goals in payments under the contract for the from Kura and Jeyranbatan water terms of the urban infrastructure. Design, Supply and Installation of treatment plants and Oguz-Qabala- Drastic reforms will be carried out in the Wastewater Treatment Plants. Baku waterline. housing economy, people’s access to water supply and sanitation improved, Key players Presently there is a separated cities and their suburban settlements provided with treatment facilities and 1- The Azersu Open Joint Stock sewerage system in Baku. Sewerage Company (OJSC) provides water system is consisting of very few monitoring in this sphere reinforced. treatment, supply and sanitation ceramic, concrete, asbestos-cement, cast iron, reinforced concrete pipes and services in the Republic of tunnel-shaped collectors. The total Azerbaijan. length of economical and domestic 2- Aquamatch Turkey sewerage lines is 1500 km. The 3- Waterman LLC diameter of distribution sewerage lines 4- Endress Hauser AG is 150-200 mm; the diameter of street 5- Water Engineered Technologies lines and collectors is changed between 300 and 4000 mm. Besides it, presently there is a rain sewerage lines Table 1-9: Related Tenders Held with the length of 156 km in Baku. The Project Name Issue Date The Client diameter of rain transmission main is CONSTRUCTION OF SEWAGE COLLECTORS IN AGDASH TOWN 26-Feb-18 AzerSu Joint Stock Company changed between 400 and 1200 mm. WATER AND SEWERAGE NETWORK CONSTRUCTION IN SHAKARA BA12D V-DILeAcGE-17 AzerSu Joint Stock Company The total capacity of wastewater discharged from sewerage lines is SUPERVISION CONSULTANTS FOR AZERSU. REF MEMO ON MINOR CH2A5-NAGuEg -D17TD 3JULAYz2017erSu Joint Stock Company more than 1 million m3. The total Design, Supply and Installation of Wastewater Treatment 02-Aug-17 AzerSu Joint Stock Company capacity of 72 Sewerage Pumping Plants in 3 Cities Stations is 1 million m3 per day. Audit Services for SAMWC for FY 2015-2018 27-Jun-17 AzerSu Joint Stock Company Source: Asian Development Bank

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to address the issue, which has Waste Management Chart 1-7: Generation of wastes by economic activity become a landmark in the area. The types Poorly managed solid waste was a Action Plan includes activities to noticeable environmental issue, with address issues related to the clean-up the smoke from the Balakhani landfill, of the Baku Bay, Bibi-Aibat zone, area the main dumpsite for Greater Baku, of the International Airport and being visible from far away. Outside the Absheron Peninsula from oil puddles central city, informal dumpsites were as well as oil contaminated land and numerous, especially in the new areas under local water containing settlements where service coverage considerable process waste. One of and quality were inadequate. Both major projects was the construction Balakhani and the informal dumpsites and start-up of a plant in Baku to posed health risks to residents and incinerate solid municipal waste. The waste pickers. The rapid population project was implemented at the level of growth across the Peninsula the European standards. exacerbated the solid waste problems. The primary challenges for solid waste management (SWM), and collection in particular, were lack of coverage, lack of service quality and lack of safe disposal options.

Table 1-10: Generation of wastes by economic activity types (thsd. ton) Size of waste management Sector

2013 2014 2015 2016 2017 CAGR Management of solid waste is poor in Agriculture, fishing and forestry 18.7 18.4 20.0 25.9 21.2 3% most urban centers, with smaller towns Mining 334.3 550 196.7 644.5 186.6 -11% performing worse than Baku or not Manufacturing 482.3 394.4 576.6 650.5 710.6 8% performing at all. Unsafe landfills and P roduction and distribution of electricity, gas and water 5.6 3.3 4.6 6.2 6.2 2% uncertain separation of hazardous from Construction 1.2 1.1 3.3 1.6 1.6 6% nonhazardous waste are the key Other branches 62.6 63.9 85.3 100.9 252.1 32% 1 Hard domestic wastes 1,670.9 1,354.9 1,534.7 1,590.1 1,576.2 -1% problems, and minimum waste 1 3 m conversed to ton using of rate recycling a subsidiary one. Source: State Statistical Committee of Azerbaijan

Azerbaijan attaches importance to environmental issues and therefore, in

2005, has adopted a 5-year Action Plan

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Figure 1-1: Waste and chemical issues in Azerbaijan

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Table 1-11: Generation, use and disposal of hazardous wastes Chart 1-9: Generation and disposal of medical (thsd. ton) wastes (ton)

Source: State Statistical Committee of Azerbaijan

Chart 1-8: Generation, use and disposal of

hazardous wastes

Source: State Statistical Committee of Azerbaijan Methods of waste disposal used in Azerbaijan

Hundreds of thousands of tons of solid waste are generated daily by more than three million people living in Azerbaijan’s capital, Baku. The new solid waste management system established in Baku includes an incineration and recycling plant Sou rce: State Statistical Committee of Azerbaijan and is the first of its kind in the entire country. Table 1-12: Generation and disposal of medical wastes (ton) The World Bank is helping the Azerbaijan 2013 2014 2015 2016 2017 CAGR government with improved solid waste Quantity of generation hazardous wastes 202.7 456.6 262.6 632.6 266.0 6% collection and disposal operations in the Quantity of use hazardous wastes 0.6 3.2 5.2 47.8 5.4 55% Greater Baku area, which for years were Quantity of disposal hazardous wastes 86.4 111.3 210.9 25.9 35.8 -16% unmanaged, and environmentally unsafe. Source: State Statistical Committee of Azerbaijan when all and any waste in Baku was dumped at many illegal dump sites and

without any regard to content, the waste is now collected, compacted and transported

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to the Balakhani landfill by the government and its chlor-alkali industry used mercury in improvements not only help to improve owned trucks. its processing. By the end of the Soviet era, environmental quality, they also reduce the areas around Baku, the capital city, had greenhouse gas emissions and improve Then the trash is sorted for recycling by become pollution hotspots. Historically, energy efficiency and recovery in the more than 130 men and women, who now three quarters of the country’s industrial management of waste. have government contracts and medical production and municipal waste generation insurance, after years of illegally collecting occurred on the Absheron Peninsula where Hazardous Waste Classification garbage in the area before the new Baku and many industries are located. This System exists in the country. It is recycling plant was established. pattern continues today. adopted based on legislation on wastes and Basel Convention and the The preparation of a national solid waste During the transition to independence, pesticides waste have been included in Azerbaijan’s economic profile began to management strategy is underway, based the classification. on successes achieved with the waste change, and most industrial uses of management system for Baku. The new, hazardous chemicals were reduced or integrated approach of good sanitary stopped. No remediation occurred, The National Laws on the management disposal, incineration, and waste recycling however in recent years, the country has of hazardous wastes: “On Industrial not only provides safe and environmentally demonstrated a strong political will and has and Domestic Wastes”, “On controlled waste management, but also accumulated the resources necessary to Phytosanitary Control”, “On Ecological aims at recovering energy and substantially clean up the legacy pollution. International Safety” and “Radiation safety of reducing the amount of waste that needs to donors also responded to these positive population” include the relevant be sent to a landfill. trends and provided financial and technical regulations on the management of support. hazardous wastes (collection, That means the entire country and its transportation, storage, neutralization, Azerbaijan now enjoys improved population could soon benefit as well, disposal, etc.). Sadigov says, from the environmentally environmental safety in the areas of oil safer and better managed methods of solid extraction and transportation and in the waste collection and disposal. chemical industry. The Soviet practices of Wastes are placed in accordance with managing municipal waste and of the relevant rules related to their discharging communal and industrial replacement. Special Personal Main waste disposal Facilities wastewater to the Protection Equipment, where required, Azerbaijan is one of oldest oil-producing is used. nations in world and during the Soviet era Caspian Sea are being replaced by new became one of the largest manufacturers of waste management systems that limit There are organizations dealing with agricultural chemicals, producing almost waste generation, sort waste by types, and sorting and utilization (disposal) and re- half a million tons of dichlorodiphenyltrichloroethane (DDT) and use of wastes. At present, the improve recycling efficiency and storage Ecotechnopark is being established in other pesticides. The country was a large safety. Water supply, sanitation and consumer of ozone-depleting substances wastewater treatment systems are being Baku for the re-use of larger volume for air-cooling equipment and refrigerators upgraded in several urban centres. These wastes 15 | Page

Figure 1-3: Absheron peninsula: present situation Figure 1-2: Absheron peninsula: Situation 20 year s ago :

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Prospects of waste management household energy consumption level; it further envisages the introduction of The Government has prepared a effective financial and waste accounting comprehensive National Solid Waste systems and adoption of a gradual tariff Strategy that sets a detailed phased increase scheme that should allow to roadmap to enhance the sector and its gradually offset the government subsidies performance. The overall objectives of the by 2035. The National Strategy and Strategy are to (i) improve core collection supporting background studies, prepared and disposal processes including the with funding under the ongoing Integrated development of regional landfills and Solid Waste Management Project transfer stations aimed to provide disposal Additional Financing (ISWMP AF), offers services for various groupings of rayons plausible development approaches given throughout the country, which is then the state of the sector in Azerbaijan and followed by more ambitions targets for provides a solid direction for sector recycling and recovery; (ii) ensure safe and development. The Strategy is in proves of efficient neutralization and disposal of being endorsed by the Cabinet of Ministers hazardous wastes to minimize damage to and the Presidential endorsement is public health and the environment; and (iii) expected before appraisal. ensure the efficient use of available resources in setting up the investments and Key Players development schemes that would improve solid waste collection, recovery and 1- Inciner8 Limited disposal in all the country’s rural and urban 2- Water Engineered Technologies areas. The Strategy introduces the regional 3- Hako GmbH approach for disposal, based on 8 waste 4- CQA International Ltd sheds served by one regional sanitary 5- CQA International Ltd landfill each and several transfer stations. The Strategy contains several options for sustainable institutional and financial set up of the sector, including the establishment of a national disposal company to run the regional landfills and transfer stations that are to be built in the short and medium term. The Strategy envisages establishment of the hazardous waste management infrastructure and facilities. The Strategy proposes to improve the tariff collection rates and financial accounting by attaching it to the electricity bill, following a differentiated tariff scheme depending on 17 | Page

Water Management and Supply There are 8,359 rivers in the Republic Map 1-2: Ground Water Map and two of those (Kur and Araz Rivers) have a length of more than 500 km. Water discharge of Kura river before its joining with Araz is 540cub.m/s and Araz 300cub.m/s. The flow of rivers directly flowing in to the Caspian sea from Giba – Kgachmaz and Lankaran Astara regions makes up 70 cub.m/\sec

In summary, the water resources of Azerbaijan are distributed as following:

· River waters: 28.5 to 30.5 km3 of which 9.5 to 10.0 km3 belong to internal rivers and rivers flowing into the Caspian Sea Map 1-3: Flow Module Map · Freshwater lakes: 0.03 to 0.05 km3 · Water reservoirs: full capacity of 20.6 km3 and a useful capacity of 12.4 km3 · Exploitation capacity of ground waters: 8.0 to 9.0 km3 · Water resources of glaciers: 0.080 to 0.085 km3

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Main dams and their capacity

The main dams of Azerbaijan and their capacities are shown in the table below: Chart 1-10: Azerbaijan Dams, capacity and Applications

Reservoir Reservoir Dam Reservoir Water Flood Hydroelectricity Dam height Reservoir Water Flood Hydroelectricity Name of dam capacity Irrigation NavigationRecreationName of dam capacity Irrigation NavigationRecreation height (m) area (km2) supply control (MW) (m) area (km2) supply control (MW) (million m3) (million m3) Kondalanchay 2 14.0 2.1 0.4 x Qanli gol 11.0 1.0 0.2 x Noh ur-Qishlaq 8.5 18.2 2.0 x x Hajiqedirli 1 9.2 1.2 0.2 x Batabat 0 11.5 1.6 0.2 x Mahmudavar 16.4 1.6 0.6 x Batabat 1 11.0 1.2 0.2 x Agstafachay 52.5 120.0 6.4 x x Ashiq Bayramli 10.0 3.6 0.8 x Araks 40.0 1,350.0 145.0 x x x x Varvara 12.0 62.0 21.4 x Madagiz 28.0 5.9 0.6 x Kahab gol 6.0 1.1 0.3 x Zogolovochay 26.0 3.4 0.5 x Mingacevir 80.0 15,730.0 605.0 x x x x x x Nore gol 8.0 1.0 0.3 x Goy Gol 8.5 6.6 0.7 Sarsangh 125.0 565.0 13.9 x x x Azer Ahmedli 8.0 1.0 0.2 x Yuxari Khanbyulanchay 64.0 52.0 2.5 x x Shikhlar 1 7.5 1.2 0.3 x Arpachay 60.0 150.0 6.0 x x Jeyranbatan 6.8 186.0 13.9 Salvarti gol 8.0 1.2 0.2 x Shikhlar 2 7.5 1.2 0.9 x Jeyri 1 8.0 1.0 0.1 x Mishar chay 5.8 2.1 0.8 x Jeyri 2 8.0 1.3 0.2 x Sefikurd 12.0 3.4 0.5 x Ashagi Kondalanchay 25.0 9.5 1.5 x x Uzun-Oba 17.7 9.0 1.2 x Chalkhanqala 9.0 1.5 0.1 x Javanshir 8.0 4.3 0.8 x Maraza gol 11.0 1.2 0.4 x Khatinli 14.7 4.1 0.8 x Yayji 9.0 1.5 0.2 x Babaser 2 22.1 2.0 0.5 x Hajiqedirli 9.0 3.5 0.3 x Khok gol 11.5 1.2 0.2 x Shamkir 70.0 2,677.0 115.0 x x x x Agdamkend 11.0 1.6 0.5 x Dize gol 5.0 1.0 0.1 x Yekekhana 23.0 18.6 0.5 x x Ayrichay 23.0 80.6 0.7 x x Xachinchay 38.0 23.0 1.3 x x Qelejuq 1 22.0 1.6 0.3 x Zumurkhach 6.3 1.3 0.5 x Injachay 24.5 7.0 0.0 x Kondalanchay I 23.3 3.9 0.5 x Vileshchay 37.0 46.0 2.5 x x Levain 17.5 6.3 1.3 x x Bulaq dere 25.0 1.2 0.2 x Pirssatchay 16.9 0.2 x x Chogazchay 35.0 20.0 0.2 x x Bolqarchay 18.0 12.0 0.1 x x Inje su 26.0 2.6 0.3 x Nehrem gol 16.2 6.0 0.9 x Vaykhir 23.0 100.0 0.5 x x Sirab 22.6 12.7 0.2 x x Benenyar 35.0 17.4 0.2 x x Axinjachay 42.5 14.0 0.9 x x Yenikend 24.0 158.0 22.6 x x x x Source: Food and Agriculture Organization of the United Nation

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Precipitation Water Consumption in various sector Azerbaijan is situated on the northern Main indicators characterizing water edge of the subtropical zone. Its resources by types of economic climatic diversity is the result of its activities in 2017 are shown in the table geographical location and landscape, below the proximity of the Caspian Sea, the Table 1-13: Main indicators characterizing wa ter resources by types of effect of sun’s radiation and air masses economic activities in 2017 (million m3) of different origin. Water Volume o f Water losses Discharge of which abstraction Fresh water recycled and during of sewage untreated The climate in Azerbaijan is from natural consumption consequently transportation waters waste water continental. The weather in the resources used water lowlands is arid, with average summer Agriculture, hunting and forestry 11,170.5 6,528.8 3383.4 3,690.1 1.3 temperatures of over 22 °C. In the Mining 299.1 304.1 200.0 257.2 21.7 Manufacturing industry 10.7 26.4 259.4 0.9 13.4 2.4 mountain regions, temperatures can Production and distribution of 1,281.1 2,199.2 1,914.8 241.8 1,014.5 71.7 electricity, gas and water fall below 0 °C in winter and in Nakhichevan severe frost may occur. Transport, storage and communication 9.8 14.0 9.8 1.4 13.9 8.7 Humid tropical weather prevails in the Other branches 10.1 81.2 14.3 0.1 463.5 219.9 coastal zone near the Caspian Sea, Total 12,781.3 9,153.7 2,398.3 3627.6 5,452.6 325.7 Source: State Statistical Committee of Azerbaijan mainly in the Länkäran lowlands in the southeast. The estimated average Chart 1-11: The share of Water Consumption in various sector precipitation is 447 mm/year. The maximum annual precipitation falls in Lankaran (1,600 to 1,800 mm or 63 to 71 in) and the minimum in the Absheron Peninsula (200 to 350 mm or

7.9 to 13.8 in).1

1 Food and Agriculture Organization of the United Nation 20 | Page

Main water supply sources There are 8,359 rivers in the Republic and two of those (Kur and Araz Rivers) have a length of more than 500 km. Chart 1-12: water supply sources Water discharge of Kura river before its joining with Araz is 540cub.m/s and Araz 300cub.m/s. The flow of rivers directly flowing in to the Caspian Sea from Giba–Kgachmaz and Lankaran Astara regions makes up 70 cub.m/sec

Table 1-14: water supply sources (Km3)

3 Volume (Km ) River waters 9.5 Freshwater lakes 0.03 Water reservoirs* 12.4 ground waters 8.0 Water resources of glaciers 0.08 *full capacity of 20.6 km3 and a useful capacity of 12.4 Km3

Source: EU Water Initiative

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Development Plans National water supply and sanitation project is presented to improve the Table 1-15: National water supply and sanitation project Components availability, quality, reliability, and sustainability of water supply and Amount at Approval Actual at Project Closing sanitation services in twenty of (US$M) (US$M) Azerbaijan’s regional (rayon) centers/ Component A: Rayon Investment 269 207 To provide quality and reliable water Rehabilitation and extension of water supply supply and sanitation services in and sewerage systems as well as facilities for selected regional (rayon) centers of water, wastewater, and sludge treatment in Azerbaijan. the project area. Component B: Regional Development Plan 5 5 Preparation of a regional development plan for the Greater Baku area. Update of the Water and Wastewater Master Plan. Component C: Institutional Modernization 13 13

Development and implementation of key reforms needed for the modernization of the water supply and sanitation sector to improve the efficiency and sustainability of its water supply and sanitation services.

Component D: Project Management 2 2 Strengthening the management capacity of the utilities to monitor and administer implementation of the Project, including audit. Contingencies 22 Total 310 227 Source: IMPLEMENTATION COMPLETION AND RESU LTS REPORT (IBRD-74600, TF-90657)

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Prospects of water management sector among other things, creating the infrastructure needed for regional Major positive factors in Azerbaijan’s development and improvement of environmental outlook include the public utilities. It adopted a nationwide enactment of new legislation and the approach aimed at covering as much of signing of international conventions. the sector’s needs as possible through Although economic development is not its internal resources and support from advanced, the country is moving slowly various donors and International in the right direction for water Financial Institutions (IFIs). Thus, in resources management. parallel with the NWSSP preparation, systems in several rayons were being

At the time of the appraisal of the funded by the Asian Development National Water Supply and Sanitation Bank, German Government Owned Project (NWSSP), the World Bank Development Bank (KFW), and State involvement in supporting the water Secretary for Economic Affairs, supply and sanitation (WSS) sector Switzerland, while the World Bank, had been modest in comparison to the Japan International Cooperation country’s huge investment needs in the Agency, and Japan Bank for sector, particularly outside Baku. The International Cooperation were World Bank had earlier financed the preparing additional projects. Greater Baku Water Supply Project Together, the combined efforts of the (GBWSP) (P008288), which closed in Government and these donors were January 2006, and supported covering the needs of about 80 percent substantial improvements to the area’s of the urban population in rayons water supply. Given the significant outside Baku and it was expected that needs in the Greater Baku area and the the rest would be addressed in the near rest of the country, the GBWSP was future. By contributing to the designed as a first step in addressing nationwide approach, the Project the country’s WSS needs. The provided an opportunity to broaden the Government’s Poverty Reduction World Bank’s support to many of

Strategy (2003–05), the State Program Azerbaijan’s rayons, thus contributing on Poverty Reduction and Economic to the overall goals of economic Development (SPPRED), included development and poverty reduction. strengthening of the utility sectors as one of its strategic goals. The Government decided to focus on,

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Related Tenders Held Key players (Public and private sectors) Water management and supply 1- The Azersu Open Joint Stock tenders is shown in table 1-16 Company (OJSC) provides water supply and sanitation services in the Republic of Azerbaijan. Table 1-16: water management tenders 2- SUEZ 3- Water Engineered Technologies Project Name Issue Date The Client 4- Aquamatch Turkey Improvement Of The Population'S Drinking Water Supply, Reconstruction Of Water Supply 29-Jun-18 AzerSu Joint Stock Company And Sewerage System, Installation Of Meters And Improvement Of The Ecological Situation Provision Of Irrigation Water 15-Jun-18 AzerSu Joint Stock Company Provision Of Irrigation Water For Sowing Areas 15-Jun-18 AzerSu Joint Stock Company Of The Acreage Created Establishment Of Distribution Channels For The 14-Jun-18 AzerSu Joint Stock Company New Irrigation Water Of The Araz River Recourse: Tenders worldwide

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Fisheries Size of the sector After the collapse of the Union of the Expenses on breeding and protection

Soviet Socialist Republics, and in the of fishery impotent fishes is about early years of independence, the 1,838 thousand Dollars in 2017, the fishing industry lost efficiency and there statistics show CAGR of 4 percent was a major decline in commercially during years 2013 to 2017. valuable fish species both in the Caspian Sea and in inland waters. The total volume of the fisheries shrank to less than one-tenth of their size Table 1-17: Expenses on breeding and protection of fishery between 1990 and 2005, and a similar impotent fishes (Thousands US Dollars) reduction was recorded in the same period for aquaculture production. The 2013 2014 2015 2016 2017 CAGR poor economic situation throughout the Number of fish breeding enterprises, 12 12 12 12 12 0% region and the impossibility of meeting unit the traditionally large demand for fish Expenses on breeding and protection 1,529 1,744 1,551 1,735 1,838 4% caused prices to rise and, as a result, of fishes reduced fish consumption to the in cluding: critically low figure of 3.4 kg per capita. by goals of artificial fish breeding 1,374 1,546 1,410 1,597 1,687 4% enterprises

A growth in investor interest in activities on amelioration 154 198 141 138 150 -1% aquaculture has been observed in Source: State Statistical Committee of Azerbaijan recent years. This has been due in part to the increased attention the State has given to this sector as a food-producing sector, especially because it is also part of the State Program to Ensure Food Security. In addition, the high consumer prices for fish and the growth in the population’s purchasing power against a backdrop of high growth in the economy have encouraged greater interest in fisheries.

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Main fishery resources and accessibility are the cause of many Table 1-18: Aquatic species disputes. Natural resource sand potential of the Total Endemic fisheries sector: Biotic group · Rivers species species

· Caspian Sea Phytoplankton 441 17 Azerbaijan has 8359 rivers, of which Zoop lankton 315 64 3218 flow directly into the Caspian Zoobenthos 380 190 The Caspian Sea, with its political and Sea. The two largest rivers (the Araz economic importance and known for its Fi sh 133 54 and Kura) have a length of more than Source: Azerbaijan fifth national report natural wealth, has been a focal point 500 km within the boundaries of the for Azerbaijan since the eighteenth country. Inland capture fisheries in century. The Caspian Sea is known for rivers mainly focus on the Araz and the large diversity of fish found there, Kura Rivers, with most fishing taking which is the result of geographical, place on the Kura River. climatological and hydrological factors. Because of the large number of Available aquatic species shallow areas in the sea, nutrient mixing occurs, resulting in high primary The country's fresh water basins and the production and, therefore, also greater Caspian Sea account for 133 species of fish production. Its five littoral States fish. They are fished in the Kur River, benefit from the Caspian Sea in three surrounding lakes, as well as in the ways: Mingechevir reservoir. Most of fish are anadromous or semi-anadromous (the young grow up in salt water and migrate to 1- The Caspian Sea has large natural fresh water to breed after they reach oil and gas resources that are maturity). The most valuable of extracted, used and/or exported anadromous fish are salmon, sturgeon, stellate sturgeon and beluga. Aspius, 2- It forms an important fishing area for Chalcalburnus and eel are also sturgeon and kilka; and anadromous fish. Sturgeon meat and caviar are highly valuable. Beside, the water basins of Azerbaiajn contain such

3- The sea is the only possible way for valuable fish species as bream, sazan, its landlocked littoral States to access rutilus kutum and others. international waters, through the Volga River and several canals in the Russian Federation. These resources

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Production Total quantity of caught fish is about

65,484 tons in 2017; the statistics show Table 1-20: Total quantity of caught fish CAGR of 5 percent during years 2013 (tons) to 2017.

2013 2014 2015 2016 2017 CAGR Table 1-19: Fish caught by quota (tons) fish caught by farms engaged in 387 370 603 645 707 13% lake and puddle fishing Fish species 2013 2014 2015 2016 2017 bream 77 58 27 44 31 fish caught by quota 855 929 626 739 965 2% wild carp 28 38 41 49 37 fish caught by physical persons 49,718 48,768 50008 63,146 63,812 5% crusian 18 11 13 4 25 Total 50,960 50,067 51237 64,531 65,484 5% roach 72 52 54 50 50 omul 117 162 116 93 100 Source: State Statistical Committee of Azerbaijan chub 2 2 0 2 1 grey mullet 125 157 78 68 59 cat-fish 4 4 1 4 3 pike perah 32 12 5 3 5 herring 150 247 118 86 75 Chart 1-13 : Fish species caught by quota sprat 206 164 138 316 559 karasol 5 3 4 3 4 shamai (royal fish) 17 10 4 4 5 other types of fish 4 9 27 13 11 Caught fish - total 855 929 626 739 965

Source: State Statistical Committee of Azerbaijan

Source: State Statistical Committee of Azerbaijan

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Fish farms

Table 1-21: Characteristics of hatcheries in Azerbaijan

Hatchery Produced species Area Construction dateAnnual capacity Ali-Bayramli Hatchery Sturgeon 62 1957 3.5 million

Azerbaijan Exp. Marine Fish Hatchery Kura salmon 0.2 1976 200,000 Chaykend Hatchery Kura salmon 7.4 1955 100,000 Chukhur-Qabalingky Hatchery Kura salmon 30.5 1956 100,000 Devechi Fisheries Amelioration Station Cyprinids 3,600 1054 50 million

Khilly Sturgeon Hatchery Sturgeon 15 2003 15 million

Kura Hatchery Sturgeon 40 1954 1.5 million Lesser Qizilagac Hatchery Cyprinids 38 1954 150-200 million

Tovuz Hatchery Cyprinids 115 1989 12 million Ust-Kura Fish Plant Sturgeon 82 1956 6 million

Ust-Kura Fish Plant Cyprinids 559 1954 60 million

Varvar Hatchery Cyprinids 334 1960 10 million Yenikend Hatchery Cyprinids 100 - 100 million Source: Department for Reproduction and Protection of Aquatic Bio resources of the Ministry of Ecology and Natural Resources (unpublished data).

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Processing capacity frozen fish, smoked fish and crayfish. However, as a result of poor catches, In Azerbaijan, a number of companies the low quantity of raw material are engaged in fish processing. They supplied to processing plants means include: production is below maximum output.

· Shamkir Fish Processing Plant, The sphere has great potential for · Shahmar Ltd, development. Production takes place · Qovsani Baliq Kombinat Ltd, on a simple processing line, which · Caspian Fish Company continues with further packing, Azerbaijan Ltd, smoking, filleting, etc. The majority of · Orienta Azerbaijan Baliq Sanaye processing companies do not produce canned fish to the standards required

Ltd, by European markets. The only · M.S., company engaged in the correct kind of · Xezerbaliq Ltd. processing is the Caspian Fish Company. These companies mainly focus on processing marine species. In addition The main species of interest to the to these marine companies, there are processing industry are diadromous some smaller companies farther inland fish or semi-anadromous fish, such as that focus on processing and storing sturgeon, kutum, bream, shemaya, freshwater species. However, limited roach, asp, sander and sprat. information is available about these However, the fish species being used smaller companies as a result of the in aquaculture are not of interest to the privatized market. processing industry.

The larger companies have new and modern equipment for fish storage and processing. The latest fish processing plant that was constructed belongs to the Caspian Fish Company located in Baku. This plant has the capacity to process 300 tonnes of fresh material per day into a wide variety of products; for example, canned caviar, fresh fish, 29 | Page

Trade

Azerbaijan does not export fishery products; import of fishery products has decreased from 20,000 tons in 2103 to 15,000 tons in 2017.

Table 1-22: fishery products Import

2013 2014 2015 2016 2017 CAGR Quantity (ton) 20,460 18,977 14,675 13981 15,806 -5% Value, thous. US dollar 20,111 16,931 13,629 24918 31,259 9%

Source: State Statistical Committe e of Azerbaijan

Chart 1-15: fishery products Import

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Workforces in the sector

In 2017, 49,000 persons were employed in the Agriculture, forestry and fishing sector that is 36% of the total workforce. Chart 1-16: Distribution of employees by types of economic activity in 2017, in percent

Table 1-23: Number of employees in the fishery sector

Source: State Statistical Committee of Azerbaijan

Source: State Statistical Committee of Azerbaijan

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Main water supply sources combined is estimated at 394 km2. The not capable of sustaining a fish only lake used for commercial fishing is population on which commercial Natural resources and potential of the Lake Sarysu. Azerbaijan has more than fisheries can thrive. However, water supply in the sector as follows: 50 reservoirs that range in volume from recreational fisheries can, and do, use 16 km3 to less than 0.020 km3. Most these waters. By optimizing fish Caspian Sea reservoirs are used for irrigation and production in these waters, much hydroelectric purposes. Currently, greater production from fishery The Caspian Sea, with its political and there are only two reservoirs - activities can be achieved. In addition economic importance and known for its Mingachevir and Shamkir- that are to increasing the productivity of existing natural wealth, has been a focal point used for commercial fisheries. The fishing areas, new areas could be for Azerbaijan since the eighteenth Sarsang reservoir, located on the identified for culture-based fisheries. century. Technically speaking, the Terter River, had been used for fishing Caspian Sea is not an actual “sea” and, activities of local importance in the past In order to intensify aquaculture therefore, its littoral States have no but is currently in the occupied activities in the country, almost all maritime rights as they only border the territories of Nagorno-Karabakh. The larger irrigation canals (used for cotton sea. For this reason, Azerbaijan is a Jeyranbatan reservoir, located on the production) will need to be used for the landlocked country with no maritime rights. Absheron Peninsula, is used as a caged culture of fish. Azerbaijan has an drinking-water reservoir for Baku and estimated 65900 km of irrigation Rivers Sumgait and, for this reason; it is not canals, which offer excellent used for fishing purposes. The total and possibilities for the expansion of Azerbaijan has 8359 rivers, of which usable storage capacities of all aquaculture practices. functioning reservoirs in Azerbaijan 3218 flow directly into the Caspian Sea. 3 3 The two largest rivers (the Araz and are, respectively, 23 km and 12.4 km , Development Plans Kura) have a length of more than 500 and they have a combined surface area of over 1 000 km2. Since 1992, Azerbaijan has been a km within the boundaries of the member of the Commission on Aquatic country. Inland capture fisheries in Potential water resources for fisheries Bio resources of the Caspian Sea. This rivers mainly focus on the Araz and commission aims to identify fish stocks Kura Rivers, with most fishing taking The largest rivers (the Araz and Kura) and create consistency between the place on the Kura River. and reservoirs (the Mingachevir and littoral States of the Caspian Sea with Shamkir) of Azerbaijan are already in regard to total catch limits. Within the Lakes and reservoirs use for commercial fishing. Lake framework of this commission, an Sarysu, the largest lake in the country, action plan has been implemented to Azerbaijan has more than 450 natural is also being used for Commercial fulfil successfully the targets for joint lakes, ranging vastly in size. The total fishing. Smaller waters are not used for management, conservation and the surface area of all lakes in Azerbaijan commercial fishing because they are

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sustainable use of marine biological To create investment opportunities for - Given the current endangered status resources. the aquaculture sector, the investment of sturgeon species and the pressure climate in Azerbaijan in this sector must on the remaining wild stocks, fishing The main aims for the sustainable improve. An important aspect of this efforts should be strictly minimized or development of the fisheries sector in investment climate is the even prohibited. The farming of Azerbaijan in the long term are: implementation of legislation and sturgeon can be a sustainable policies for the aquaculture sector. alternative for wild-caught sturgeon. · Improvement of the system of Clear legislation and policies provide Responsible farming practices and management of aquatic biological more certainty and less risk for sustainable use of inputs (e.g. feed, resources; companies and entrepreneurs. This fingerlings and water resources) are · Regulation of fisheries activities and can also increase the interests of highly important. Responsible farming the creation of conditions for the foreign investors. practices can also be an opportunity for supply of fish products to the marketing. · Population of Azerbaijan; Of the three species (rainbow trout, · Organization and development of carp species and sturgeon species) - Investment costs are high. For caviar rational coastal fisheries, and that have been taken into account in production, brood stock fish are freshwater and marine aquaculture; this assessment, investment needed. Depending on the exact · Improvement of the system of opportunities for sturgeon farming have species of sturgeon, brood stock fish conservation and preservation of the highest potential. have to be 8 to 15 years old before aquatic biological resources; caviar production is possible. This makes the production of caviar a · Improvement of the scientific field of Sturgeon is the most well-known fish in capital-intensive investment with a high research and the educational system. Azerbaijan with a long standing reputation, and both sturgeon meat and risk profile. Also intensive sturgeon caviar are in demand. Besides farming requires modern facilities with Prospects of fisheries sector production for the domestic market, high investment cost. For small or A draft of a “Law on Aquaculture” is there also seem to be opportunities to medium sized companies it is therefore being prepared by the Government. export sturgeon meat and caviar to probably not possible to invest in Without a law, that focuses on other countries around the Caspian sturgeon farming. aquaculture, very little investment and Sea. Caviar is a well-known exclusive development can be carried out by product, so high end markets in e.g. existing aquaculture farms and non- Europe and the Middle East might also governmental organizations. This limits be targeted. For investments in the development of the small sturgeon and caviar production the aquaculture sector despite its large following aspects have to be taken into growth prospects. account:

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Related Tender Held Key players (Public and private sectors) In Azerbaijan, the MENR is in charge of

Table 1-24: Fisheries Related Tender Held fisheries administration. As part of this ministry, the subordinate department -

Description Country Project Title Published Date the DRPAB- carries out the Techn ical Assistance On Plant Breeding Azerbaijan ACIP - P122812 May 22, 2018 administration tasks. Under this S-19 Ocular Vaccines For Cattle Azerbaijan ACIP - P122812 June 29, 2017 department is the Azerbaijan Fisheries Source : The World Bank Research Institute (AzerFRI).

Together, these two entities advise the MENR and are responsible for estimating stocks, determining catch limits for inland waters, and awarding fishing licences that identify the section

of the water where fishing is allowed, the season when fishing is allowed, and

the catch limit for the licensed body of water.

The DRPAB houses four sub

departments:

· Aquatic Bio resources Conservation Service,

· Fish Breeding Enterprises, · Fleet Services,

· AzerFRI.

The financing of the DRPAB and all its sub departments is provided by the

MENR, which in turn is financed by the State Government. Activities,

development and management decisions are made by the central

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organ. There are no decentralized local protective forest belts and, other Size of the sector agencies. forests. In 2018, the gross domestic product of the Agriculture, hunting and forestry All forests of country are publicly owned Forestry Management sector is about 2,307 million Dollars. and managed by the state in 5% of the total GDP of Azerbaijan was Forests are one of the most valuable accordance with the provisions of the attributed to this sector. natural resources of Azerbaijan that Forest Code and the Law on integrate soil, water, trees, bushes, Environmental Protection. Azerbaijani vegetation, wildlife, and forests assigned to the first group of Total forest area (natural & man-made) microorganisms which mutually affect forests. each other from biological viewpoint in Forest share in the countries area is the course of development. In about 12%. They are transferred to the permanent Azerbaijan, the total area assigned for use of forestry enterprises for the forestry (state forest fund area) is about intended purpose for the development 1213,7 thousand ha of which .1021 of forestry. thousand ha is currently covered by forest vegetation, corresponding 11.8% of the country area. Forestry Development Department under the Ministry of Ecology and Natural Resources (MENR) is the main Azerbaijan is a low forest cover country government agency responsible for where the existing forests are unevenly management of the forest lands and distributed that almost 85% of them are resources while the forests under the common in mountainous and hilly protected areas are managed by the regions and 15% in the plains. Department of Biodiversity and Protected Natural Areas. In accordance with the economic and ecological value, location and functions as well as in terms of protection viewpoint, the country's forest resources are rated as first group forests. They are divided into seven protective categories as such; Forest reserves, Resort forests, particularly valuable forest areas, Forest green areas in cities and other populated areas, Wild fruit forests, State

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Table 1-25: GDP in current prices, million Dollars 2014 2015 2016 2017 2018 Agriicultural,hunting and forestry 1,779 1,948 1834.31 2,138 2,307 Gross domestic product 34,818 32,204.0 34,396 39,880 46,119 Source: State Statistical Committee of Azerbaijan

Table 1-26: Main indicators of forest funds

2012 2013 2014 2015 2016 Total area of the country (1000 hectare) 8,660 8,660 8,6 60 8,660 8,660 Total area of forest fund lands (1000 hectare) 1,041 1,040 1,040 1,040 1,040 forest share in country's area (percent) 12% 12% 12% 12% 12% Total tree resources (million cubic meter) 149 150 151 152 153 Source: State Statistical Committee of Azerbaijan

Table 1-27: Land pre paration and planting of seedling in forest fun d lands

2012 2013 2014 2015 2016 Seedlings planted in the growing areas - total, 2,936 3,283 2,592 2,639 2,750 thsd unit kinds of coniferous 1,098 868 1,178 1,180 1,016 Planting of engraftment in the engraftment 757 799 863 626 654 areas, thsd unit Land preparation in the state important land- 3,052 2,736 2,538 2,577 2,583 total, ha

Source: State Statistical Committee of Azerbaijan

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Environmental protection policies Resources has decisively increased persimmon (Diospyros lotus), Caspian the number and size of protected locust tree (Gleditsia caspica), The 1998 NEAP identifies four priority areas. Between 2003 and 2005, Caucasian alder (Alnus subcordata), categories (divided into protected land doubled, increasing black alder (Alnus glutinosa subsp. from 4% to 8% of the country’s total barbata), white poplar (Populus alba) 32 objectives): land area, reaching a total of over 604 Caucasian wingnut (Pterocarya 000 hectares. In addition, new fraxinifolia), Persian ironwood (Parrotia 1. Pollution from industrial legislation including stricter penalties persica), Caucasian zelkova (Zelkova production (oil exploration and has been issued to combat poaching. carpinifolia), butcher's broom (Ruscus production, energy, transport, As a result, the population of red-listed aculeatus), velvet maple (Acer other sources). species has noticeably increased – velutinum), Cappadocian maple (Acer 2. Caspian Sea. between 2002 and 2005 the number of cappadocicum), wych elm (Ulmus 3. Forestry, land and biodiversity. gazelles increased by 60%, the number glabra), Caucasian lime tree (Tilia 4. Institutional development. of bezoar goats by 53% and the dasystyla subsp. caucasica), wild number of wild cats by 24% cherry (Prunus avium), wild service tree (Sorbus torminalis), sweet chestnut The 2003 PPRED (State Programme Forest farming production (Castanea sativa), Nordmann fir (Abies on Poverty Reduction and Economic nordmanniana) among many others. Development) includes environment as one of the national priorities. It The forests of Azerbaijan account for mentions environmental conditions as 150 endemic species of trees and a cause of poverty and as a tool to bushes out of 435 species of trees and reduce it. The PPRED identifies the bushes. Some endemic tree species following main environmental problem are, the Hyrcanian box tree (Buxus areas: hyrcana), Caucasian pear (Pyrus communis subsp. caucasica), 1. Water resources. Lenkoran acacia (Albizia julibrissin), 2. Land. chestnut-leaved oak (Quercus castaneifolia), Caucasian oak (Quercus 3. Air. macranthera), Caucasian ash 4. Forest. (Fraxinus angustifolia subsp. 5. Caspian Sea. oxycarpa), European ash (Fraxinus excelsior), European hornbeam Biodiversity conservation is one of the (Carpinus betulus), Oriental hornbeam environmental policy priorities of (Carpinus orientalis), Oriental beech

Azerbaijan. To reverse negative trends, (Fagus orientalis), Caucasian the Ministry of Ecology and Natural 37 | Page

Trade

In 2012-2017, Azerbaijan imported an average of 203,500 thousand dollars of forestry products. At the same time, the amount of exports is 1,050 thousand dollars. Therefore, this country is a net importer of forestry products.

Table 1-28 : Forest product Export and Import (thousand dollars)

2013 2014 2015 2016 2017 CAGR Import (1000 Dollars) 128,930 229,777 189,417 212,849 256,535 14.8% export (1000 Dollars) 1,411 919 1,197 1,129 592 -16% net export (1000 Dollars) -127,519 -228,858 -188,220 -211,720 -255,943 - Source: International Trade Centre

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Workforces in the sector The new National Forestry Program Prospects of forestry management and its Action Plan for the period 2020 sector The forestry sector is a source of to 2030 were finalized. employment and income for a National Forestry Program (NFP) of considerable section of the population, The National Forestry Program was Azerbaijan has been prepared for a 15- especially women. drafted within the framework of a year period that covers the years from In 2017, 49,000 persons were employed in project on the revision of the national 2015 up to 2030. The preparation the Agriculture, forestry and fishing sector forestry program and the modernization works started in 2012 and completed at that is 3% of the total workforce. of the forest management system the end of 2013. Apart from the state which was supported by UNECE and forestry service, it also refers a wide Development Plans jointly implemented by the Food and perspective of different stakeholders including public institutions, academia, Azerbaijan is strengthening its forest Agriculture Organization of United national and international expertise, sector with a new ten-year national Nations (FAO) and the Ministry of NGOs on the management of country’s forestry program, developed with Ecology and Natural Resources of forest resources. UNECE support. Strong emphasis is Azerbaijan. The National Forestry put on increasing forest cover while Program provides a sound legal basis conserving and improving the country’s for forest management and ensures the The basic aims of the NFP are to forest resources. development of institutional capacities. promote sustainably meeting of the It will now be put forward through the public expectations from the country’s forests in a the long term, provide The sustainable development of forests national process for official adoption. means to harmonize the forest is among the main priorities of the management policies into the government of Azerbaijan. In May The presentation of the newly government policy instruments and 2019, Azerbaijan joined the developed forestry program was rapid structural changes and, to identify international Bonn Challenge on forest attended by the Minister of Ecology and the challenges and means for landscape restoration and committed to Natural Resources, the Chairman of development of institutional and legal restore 170,000 ha of forests by 2030 the Azerbaijan Food Safety Agency, framework for national forest and an additional 100,000 ha if further the Head of the FAO Partnership and management. funding can be mobilized. This Liaison Office in Azerbaijan, the Deputy commitment increases the visibility for Chief of the UNECE/FAO Forestry and the country’s efforts to improve and Timber Section and the international · Strategies: sustainably manage their forests, which forestry specialist from the FAO sub- 1- Forest policy is well integrated with is also a main target in the country’s regional office in Turkey. the national, regional and sectoral new forestry program. policies and is put high in the national development agenda.

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2- Given the first priority to 8- Enhanced forest education and hectares under sustainable preservation of ecological and research are providing essential management, number of hectares protective functions of forests, backstopping to sustainable forest under protection, monetary units of sustainable management and use management. investment in forestry etc. These of forest resources contributes to a 9- Climate change (CC) adaptation outputs will have to be documented, better satisfaction of the needs of and mitigation concerns are monitored and reported on. society at large and rural population integrated into forest management Valuation of the contribution of in particular. decisions and implementations. forests to the country’s economy, to 3- Negative impacts on forests are · Expected results from the program poverty reduction and to sustainable reduced while forest resources and implementation development should also be biodiversity are effectively protected One set of outputs will concern evaluated and improved. Increased and conserved. favorable framework conditions that law implementation (e.g. monitoring 4- Forest areas and tree cover are will help to establish the enabling and reducing illegal logging) is significantly expanded through environment for sustainable forest another expected output of the afforestation on suitable lands and development. They comprise some process. Concerning the restoration of degraded forest of the elements of the NFP process stakeholders, the main output is areas. including laws and regulations increased capacities, not only in 5- Forests are managed in line with which reflect the previously revised technical but also in organizational participatory multipurpose national forest policy. Legal and management matters, and management plans, elaborated amendments in related sectors and especially in participatory and inter- based on reliable information and regarding cross-cutting policy sectoral approaches. Increased modern methodologies for forest objectives which are favorable for participation in and transparency of resource inventory, and the development of the forest sector an NFP process will most probably assessment. and improved institutional set-up result in more partnership 6- People of Azerbaijan are aware of and capable human resources, agreements or other forms of the benefits of forests and actively mechanisms for dialogue and cooperation between stakeholders. involved in sustainable forest consensus building among all management. stakeholders. Another set of outputs Key players (Public and private sectors) 7- Institutional capacity, financial will consist of those related to field- 1- The restructuring of forestry mechanisms and regulatory level implementation and practical institutions is now high on the framework for sustainable forest realizations (e.g. afforestation, political agenda in Azerbaijan, management are improved and forest management). Such outputs gaining full support from the strengthened. include afforested area, number of

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Ministry of Ecology and Natural Resources. One of the key steps is to review and update the draft National Forestry Program. 2- Ramex Ltd 3- World Wildlife Fund

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Territory Planning most remote villages of Azerbaijan, all international system of economic communications required in the daily relations. To this end, taking into A city is historically established and the lives of citizens (communications, account the favorable geographical most rational and sustainable form of Internet, banking services, public position and broad potential, it is human settlement. utilities, roads and so on), health and planned to turn the country into the education services will be provided. region’s commercial center and to bring Owing to objective regularities of Azerbaijan will be a place where the the volume of per capita non-oil export regional town planning, cities have population’s incomes are high, to 1,000 US dollars. In order to achieve repeatedly been rebuilt, changing their unemployment is minimum, human the previously mentioned goal, state architectural image and planning capital is highly developed, the regulation that ensures healthy structure. environment is protected and health competition in market economy and every citizen has broad conditions, transformation into an Urban development of Azerbaijan has a opportunities. Because of the export-oriented economy that makes centuries-long historical past, as measures stipulated by the concept, by efficient use of energy and creates high witnessed by wide spreading of cities the end of the period, the volume of per benefit and principles of a complex built on regular base throughout capita GDP in the country will increase approach to the development of socio- countries territory. more than twice and reach 13,000 US economic spheres will be taken as a dollars. basis. Within the framework of the Prospects of Territory Planning concept, it is planned to turn the According to the World Bank country’s economy into an economy · Azerbaijan 2020: Strategic View classification of GDP, in 2020 based on efficiency as a result of a and Main Priorities Azerbaijan is expected to become a full growth in general productivity and member of the group of “countries with ensure transition to a stage The main strategic view of the concept high average income” and eliminate its characterized by the dominance of is to take account of the current dependence on the export of innovations. opportunities and resources and attain hydrocarbons, which is the main a stage characterized by sustainable reason for its belonging to this group at Increasing the competitiveness of the economic growth and high social the moment, and to reach the highest economy encompasses such fields as welfare, effective state management positions in the group of “countries with the protection of macroeconomic and supremacy of the law, the full high human development” according to stability, the strengthening of the ensuring of all human rights and the human development classification coordination of the monetary and fiscal freedoms and the active status of the of the UN Development Program. From policy, the improvement of the business civil society in the country’s public life. an economic point of view, the environment, support for private In 2020, Azerbaijan will be an Azerbaijan Republic will turn from the initiative, the development of the economically and politically developed region’s leading state into a highly market of financial services and the and competitive country. Even in the competitive participant in the improvement of the foreign trade and

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investment policy. During this period, it revenues, to increase competitiveness The expansion of opportunities for is planned to keep inflation at the and to develop export possibilities. using ICT and communication services, acceptable level and ensure gradual the creation of a reliable security transition to a more flexible currency In the Development Concept system aimed at developing rate. “Azerbaijan 2020: Look into the information and communication Future”, an export-oriented economic technologies, the formation of national At the same time, purposeful measures model is taken as a basis, and it is standards, as well as the launch of will be taken to improve the structure of planned that increasing the totally digital broadcasting across the the economy. The modernization of the competitiveness of the economy and country and the halting of analog oil and gas sector and the improvement of the structure will boost broadcasting, and the total use of e- petrochemical industry, the non-oil exports. Along with the speedy government services will be in the diversification and development of the development of the non-oil industry, the center of attention as one of the main non-oil industry, the expansion of promotion and expansion of innovative priorities in the formation of Azerbaijan opportunities to use alternative and activity will create favorable grounds for as a modern state. renewable energy sources, the the formation of an economy based on development of the agrarian sector, the knowledge in the country. The purpose of any economic growth is strengthening of food security, to increase social welfare. From this expansion and development of trade In order to achieve these goals, it is point of view, one of the main priorities and types of services and the important to make full use of all the of the concept is the development of improvement of the foreign trade and country’s possibilities, to make effective social spheres and human capital. investment structure will be priority use of the existing economic, social Within these priorities, the main spheres. and political resources and create spheres are to increase the quality of conditions for strengthening the education and services, to strengthen It is planned that during the period country’s potential. From this point of social security, ensure gender equality covered by the concept, the average view, it is planned to develop the and to develop the family, youth pace of annual real growth in GDP in energy, transport, transit and logistical potential and sports. the non-oil sector will be more than 7 infrastructure, to concentrate on the per cent. development of regions, to form The issue of poverty within the regional development centers taking framework of the concept is assessed The main task in the current stage is to into account the competitive at the level of the concept of “multi- speed up the diversification of the advantages of each region and to factor poverty” in line with modern economy, to maintain the high pace of develop the infrastructure and social approaches to the human development the development of the non-oil sector in services in cities and villages. concept. Over the past 10 years, the future regardless of the level of oil Azerbaijan has gained undeniable achievements in drastically reducing poverty. The settlement of the problem 43 | Page

of “absolute poverty” in our country, i.e. In order to realize the targets stipulated Azerbaijan for the purpose of the the sharp decline in the number of by the concept, measures will continue screening requirements under articles families included in the category of the to constantly improve the legislative 4.3 and 5 of the SEA Protocol. poor within the framework of accepted base and strengthen the appropriate criteria is a result of the successful institutional potential. The most relevant examples of socio-economic policy. Within the strategic documents potentially framework of the current concept, the The preservation of cultural heritage, its requiring SEA are: problem of “absolute poverty” will effective management, the protection constantly be in the center of attention and enrichment of new creative results, · State Program on Socio-Economic again, and along with that, the environmental and ecological problems Development in Baku City and its expansion of the middle class and the are accepted as the main priority within Suburbs - 2011-2013, 4 May 2011, strengthening of the role of this class is the framework of the concept, and it is No.1490 (II program); one of the main purposes. The planned to take the appropriate policy · Action Program on Socio-Economic experience of various countries shows measures in these fields. Development in the Settlements, that countries with a stronger middle February 27, 2006, No. 1338 (I class are more sustainable from Investment Made in Territory Planning program); political, economic, social and other · Action in Connection with the A strategic environmental assessment aspects and have higher development Construction and Repair of Roads in shall be carried out for plans and potential. the Settlements, programs which are prepared for · Detailed Master Plan for Conservation Quantitative and qualitative indicators specific sectors: agriculture, forestry, fisheries, energy, industry including of the Historical Center of Baku, linked with the population and its November 8, 2010, No. 206; structure are the main elements of mining, transport, regional development, waste management, · State Program on Poverty Reduction national power, and the protection of and Sustainable Development in the the gene pool of the water management, telecommunications, tourism, town and Republic of Azerbaijan - 2008-2015, country planning or land use (art.4.2 of September 15, 2008, No. 3043 (II Azerbaijani people, issues like program); migration and demography are of the Protocol on SEA). Such programs and plans (meeting, in addition, other · State Program for the Social-Economic special importance in terms of national Development of the Regions of the security. During the period covered by requirements of the art.4.2 of the Protocol on SEA) comprise the first Republic of Azerbaijan in 2014-2018, the concept, the country’s population 2014 (III program); will increase by 1.1 per cent a year on group of strategic documents for which SEA will be required in Azerbaijan · Comprehensive Action Plan for the average and is expected to total about Years 2006-2010 to Improve the 10.2 million in 2020. under the Protocol on SEA. It is also important to understand what other Environmental Situation, September strategic documents are prepared in

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28, 2006, No. 1697 (Plan II is going to Key players (Public and private sectors) be developed) Key players in Territory Planning are · National Program for Sustainable Socio-Economic Development in the UNDP, IOM, Egis International, and local government. Republic of Azerbaijan, February 18, 2003, No. 1152 (formerly the National

Action Plan was adopted in 1998); · State Program on the Use of

Alternative and Renewable Energy Sources in the Republic of Azerbaijan

on, October 21, 2004, № 462; · State Program on Development of

Tourism in the Republic of Azerbaijan 2010-2014, April 6, 2010, No. 838 (II program);

· State Program on Reliable Provision of the Population in the Republic of

Azerbaijan with Food Products -2008- 2015, 25 August, 2008, No. 3004 (II program); · National Strategy and Action Plan on the Conservation and Sustainable Use of Biological Diversity in the Republic of Azerbaijan, March 24, 2006, No. 1368.

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Rural Development while the gas and oil sectors account Chart 1-17: Urban and rural population ratio for 36 per cent. Still agriculture is a The Azerbaijan Rural Investment major contributed to the country’s non- Project (AzRIP) was established by the oil economy, employing in Azerbaijan government of Azerbaijan’s State 40 per cent of the workforce. In rural Agency on Agricultural Credits under areas, one-fourth of household income the Azerbaijan Ministry of Agriculture. It is gained from agriculture. The country is designed to invest in the rural exports products to Turkey, Georgia, development of five economic regions Iran, Russia and other countries. Due of Azerbaijan, focusing on community- to recent the EU sanctions against based infrastructure development. Russia, the export of agricultural food

from Azerbaijan to Russia has The rural area increased. Livestock production is the

Azerbaijan is an upper middle-income second largest agricultural activity in the country, usually undertaken at a country. Agriculture’s share of exports Sou rce: State Statistical Committee of Azerbaijan declined from 10 percent in 1994 to 5.9 household level. Many rural families percent in 2004, compared with about make a living by selling cattle, meat and

30 percent prior to independence, dairy products. because of increases in oil production and exports. In terms of value added to Population in the rural area the GDP, agriculture is now next in In 2018, about 4,660,000 of the importance to the oil sector. The population of Azerbaijan, (47% of the agricultural sector employs 25 percent total population), lived in the rural area. of the workforce, with small-scale farmers producing about 96 percent of Table 1-29: Urban and rural population (1000 person) agricultural output, especially wheat, barley, forage crops, cotton, tobacco, 2013 2014 2015 2016 2017 2018 vegetables, grapes and other fruits. urban population 4,966 5,045 5,098 5152.4 5,199 5,238 Due to wide variations in climate, rural population 4,390 4,432 4,495 4,553 4,611 4,660 elevation and rainfall, the country has a total population 9,357 9,477 9,593 9705.6 9,810 9,898 highly diversified agricultural sector. Source: State Statistical Committee of Azerbaijan

Livestock production is an important economic activity in both irrigated and mountain areas. From the total GDP, agriculture accounts for only 6 per cent,

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Rural development policies labour market, paving the way for inclusive growth. Agriculture remains the Azerbaijan's biggest employer, absorbing nearly 36% of the workforce while contributing The employed workforce in the sector only 3% of GDP. It remains the second largest export sector after oil and gas. In 2017, about 4,000,000 people were Rural/agricultural development is one employed in the rural sector; it is about of the priority sectors in the 36 percent of the employed population.

Government's Strategic Roadmaps. Rural and regional development has Table 1-30: Number of e mployees in the rural sector been a priority for EU cooperation with Azerbaijan in the past years and 2013 2014 2015 2016 2017 CAGR cooperation with the Ministry of On economy, total 4,521 4,603 4,672 4759.9 4,822 1.3% Agriculture and the Ministry of Agriculture, forestry and fishing 1,677 1,692 1,698 1,730 1,753 1% Economy has been close. Support to strengthening Chart 1-18: Distribution of emplo yees by types of economic activity in 2017, in percent Productivity and competitiveness of agriculture and rural SMEs is not only important for economic diversification but needed also to ensure balanced and inclusive development by creating rural jobs. Self-employment remains at high levels and the share of informality is high, mainly in agriculture, but also in other sectors.

In the context of diversification of the economy and given the country's demography, support to (women and youth) employment and social measures will ensure that the population and especially vulnerable groups can adapt to changes in the

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Prospects of rural Development and rural development (SRRD) in WTO, through STDF, is funding a Azerbaijan, with a budget of €19.5m. project focused on strengthening International Fund for Agricultural The overall objective of this programme phytosanitary control services in Development (IFAD) currently has one is to contribute to diversification of the Azerbaijan. The project is aimed at ongoing credit project - the Integrated economy and sustainable regional supporting improvement of plant Rural Development Project with a total development in Azerbaijan, while quarantine laboratories, strengthening budget of USD 103.8 million, jointly reducing socio-economic disparities technical capacity of phytosanitary financed by IFAD and IDB and with the among regions GIZ does not have any inspectors and improving their overall goal of reducing rural poverty in specific agricultural projects, although language skills to facilitate regional and four targeted districts through three projects are related to agricultural international trade. increased food security and enhanced ubsectors: income-raising opportunities. Among other UN agencies, UNDP has 1- A private-sector development been involved in addressing EBRD has allocated USD 44 million to project; environmental issues, such as support Azerbaijan’s agricultural sector 2- A local governance project; and improved management of mountainous through local banks for the ecosystems to tackle degradation of development of agriparks and logistics 3- A biodiversity projects. The private-sector development pastures; identification of priority bases, storage of produce and ecosystems and/or economic sectors project includes a trade restoration of rural roads. vulnerable to climate change and promotion component, which development of strategies for improving EU cooperation in agriculture and rural focuses on agricultural export- their resilience. development is significant and relevant oriented value chains. The to regional priorities identified under the projects aim to improve skills in assessments of EaP countries. The market research, renewed ongoing programmes are: (i) "Support market access, international to local initiatives on regional and rural marketing, quality management development in Azerbaijan" (€4.3 etc. million). The global objective of this call for proposals for the Republic of Azerbaijan is to contribute to the IFC’s portfolio is currently USD 3 million reduction of regional socioeconomic - Azerbaijan and Agribusiness Tax disparities and to the diversification of Project - funded by SECO and focuses the economy by creating conditions for on agricultural value chains, trade balanced and sustainable economic logistics, tax administration, food development across all regions of safety, seed legislation and Azerbaijan; and (ii) Support to regional certification.

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Related Tenders held

Table 1-31: Related Tenders held

Description Country Project Title Notice Type Language Published Date

Technical Assistance And Training To Support Azerbaijan AZ HIGHWAY 3 - P118023 Contract Award English December 29, 2017 The Management And Maintenance Of The Magist ral (m) Road Network 4 Laning Of Baku-shamakhi-muganli Road Km Azerbaijan AZ HIGHWAY 3 - P118023 Contract Award English November 16, 2017 91.0 To 107.0 Construction Supervision Of Civil Works Contract 4 Lanin g Of The Baku-shamakhi-muganli Road Azerbaijan AZ HIGHWAY 3 - P118023 Contract Award English November 14, 2017 Km 91.0 To 107.0 The Collection Of Road Condition And Inventory Azerbaijan AZ HIGHWAY 3 - P118023 Contract Award English October 18, 2017 Data For Updating The Road Database Procurement Of Equipment For Road Azerbaijan AZ HIGHWAY 3 - P118023 Invitation for Bids English April 3, 2017 Maintenance Units (10 Lots) Technical Assistance And Training To Support

The Management And Maintenance Of The Azerbaijan AZ HIGHWAY 3 - P118023 Request for Expression of Interest English March 1, 2017 Magistral (m) Road Network

Source: The World Bnk

Key players

1- The government of Azerbaijan’s State Agency on Agricultural Credits under the Azerbaijan Ministry of Agriculture is the main player in rural sector. 2- Agricultural trade fairs 3- State Agro Trade Company

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Renewable Energy (wind & solar) Renewable energy sources are important for Azerbaijan; however, there is lack of practicing renewable energy except hydro energy. One of the alternative sources of energy is the wind energy. It is also best profitable due to the cost, ecological cleanness and its renewable properties compared to other alternative energy sources.

Size of the sector

Azerbaijan's wind energy production in 2017 was about 22.1 kWh that shows CAGR of 94 percent during years 2013 to 2017. Solar energy production in

2017 was about 37.2 kWh that shows CAGR of 116 percent during years 2013 to 2017.

Table 1-32: Production of energy products (in volume terms)

2013 2014 2015 2016 2017 CAGR Wind energy (million kWt hour) 0.8 2.3 4.6 22.8 22.1 94%

Solar (million kWt hour) 0.8 2.9 4.6 35.3 37.2 116%

Source: State Statistical Committee of Azerbaijan

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Renewable energy development policies renewable energy sources in the and Technological Consumption of country. The measures to be taken Energy Sector Enterprises 1- Azerbaijan 2020: Look to the include determination of main regardless of Ownership Form: This Future: Approved in 2012 by directions towards 2020 on electric decree assigns the Ministry of Fuel President Ilham Aliyev. The and thermal power production from and Energy (later the Ministry of Azerbaijan 2020 highlights the alternative and renewable sources; Industry and Energy) to oversee the possible impacts of climate change enforcement of legislative four tasks outlined in the decree. on the country’s society and frameworks; incentive measures Two of the tasks involve metering economy, and the importance of (e.g. Feed-in-Tariffs and direct and the reduction of technical preparing necessary policy subsidies); implementation of losses. measures. It also states that the projects on alternative and amount of energy used to produce renewable energy development. one unit of GDP as well as the 4- Law on Protection of amount of CO2 will need to be in line Atmospheric Air: The legal with the appropriate indicators of framework for establishment of OECD member countries towards regulations for air pollution and 2020. emissions and defines 2- Action Plan on improvement responsibilities of different agencies of ecological situation and efficient on elaboration of standards and use of natural resources for 2015- thresholds for air pollution. 2020: The Plan highlights the 5- Law on “Energy”: This law importance of developing, amongst pertains to all areas in the energy others: (i) National Adaptation Plan sector and materials and products (NAP), and (ii) nationally used in the production of energy. It appropriate mitigation action states the objectives of the state (NAMA) that incorporates elements energy policies. It contains relating to Measurement, Reporting requirements for the efficient use of and Verification (MRV) systems. energy and also has provisions for 3- State Strategy on Use of the obligations with respect to Alternative and Renewable Energy environmental protection, health Sources (2012-2020): This strategy and safety. was prepared to promote 6- Action Plan for Energy development of a range of Efficiency and Reduction of Losses

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The share of renewable energy as total energy produced

Table 1-33: Renewable energy supply, thousand TOE

2013 2014 2015 2016 2017 CAGR Total energy supply 14,630 15,085 15,569 15,393 15,472 1% Wind power 0.1 0.2 0.4 2 1.9 80%

Share of wind power

in total energy 0.00% 0.00% 0.00% 0.01% 0.01% - consumption, in percent Solar power 0.1 0.2 0.4 3 3.2 100%

Share of solar power

(photovoltaic) in total 0.00% 0.00% 0.00% 0.02% 0.02% - energy consumption, in percent Source: State Statistical Committee of Azerbaijan

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Common Finance methods in the sector invested almost €3.3 billion in various geothermal energy – 800 MW, 350 MW sectors: energy, infrastructure, - small hydro power plants. The Board of Directors of the European banking, industry and commerce. Bank for Reconstruction and It’s planned to increase the share of Development (EBRD) has approved a alternative energy in total production to new strategy for Azerbaijan which will Development Plans 20 percent by 2020. A third of them will guide the Bank’s investments and Since 2000, approximately 472 million come from the wind energy. It requires policy work in the country for the next Dollars have been invested in this 6.7 billion USD of investment. five years. sphere. Renewable energy Prospect The 2019-24 strategy sets out the According to statistics, 9 per cent of the following priorities: electricity generated in Azerbaijan in 2011 came from renewable sources, Azerbaijan enjoys a vast potential of The Bank will continue its efforts to help nearly entirely from hydro-electric renewable energy sources and strives diversify Azerbaijan’s economy by power. to make use of it. supporting the development of the private sector in non-oil sectors and In 2014 the volume of investments In 2018, electricity produced from strengthening governance of private made in the development of the renewable sources will exceed 10 and state-owned companies. alternative energy sphere in Azerbaijan percent of the total energy generated in reached 63.6 million manat. The Azerbaijan. The EBRD will work to further expand majority of this volume, nearly 34.9 access to finance for local businesses million manat, was allocated to the It is forecasted that this figure will reach by encouraging lending by banks and development of the solar energy 12 percent by 2020, and by 2030 it non-bank financial institutions as well sphere, another 28.7 million manat should reach 20 percent. This requires as by helping develop local currency went toward wind power. investment, appropriate regulatory and capital markets. framework and an optimal tariff policy. The public fund of Azerbaijan invested In 2017, the volume of electricity The Bank will step up its support to the 127 million manats in the development produced from renewable sources country’s green economy, including of alternative and renewable energy amounted to 9.8 percent of the total financing for renewable energy sources. energy production. In alternative sources, increased energy efficiency energy, the energy losses are very small, since production facilities are and cleaner transport and sustainable The total capacity of alternative and located in close proximity to the end infrastructure. renewable energy sources in the user. country is more than 12,000 The EBRD is a leading investor in megawatts. 4,500 MW of them fall on Azerbaijan. To date, the Bank has wind energy, biomass – 1,500 MW, 53 | Page

The electricity generation capacity of The projects include construction of Solar energy is also one of the most Azerbaijan is 7,172.6 megawatts, wind, hydro and biofuel power plants favorable energy sources in the world, which makes it possible to annually with a total capacity of 4,200 and it is especially promising in regions. generate about 24 billion kilowatt hours megawatts. This is while 3,500 The natural climate of Azerbaijan also of electricity. This allows Azerbaijan to megawatts will account for wind power provides many opportunities to annually export 2.1 billion kilowatt plants, 500 megawatts for solar power increase the production of electricity hours of electricity. plants, and 200 megawatts will account and heat using solar energy. During the for biofuel power plants. The cost of year, the number of sunny hours in Today, the share of alternative energy building wind power plants will be 6 Azerbaijan is 2,400-3,200, which sources in the electricity supply of million Dollars, solar – 0.87 million means that the number of sunlight Azerbaijan is 9.5 percent. In recent Dollars, and biofuel – 0.68 million falling on the territory of Azerbaijan is years, the development of renewable Dollars. higher than in other countries. This can energy sources in Azerbaijan, the be considered one of the criteria for the largest South Caucasus state on the Azerbaijan aims to increase usage of effectiveness of attracting investment in Caspian shore, has been in the focus of renewable energy sources and the the use of solar energy. The attention. Currently, the country is able country has all opportunities for this. development of solar energy can to fully meet its own energy needs, and partially solve the energy problems in seeks to supply power to the European - Windmills several regions of Azerbaijan. Some 50 market. megawatts account for solar energy. Azerbaijan is one of those countries The State Agency on Alternative and where the use of wind energy is Renewable Energy Sources of beneficial due to geographical Azerbaijan has determined areas, conditions. The Absheron Peninsula, capacities, amounts to be invested in the coastline of the Caspian Sea and producing 4,200 megawatts in 2018- the islands in the northwestern part of 2020 and other required information. the Caspian Sea, the Ganja- Dashkesan zone in the west of In the coming years, the agency plans Azerbaijan and the Sharur-Julfa region to implement 23 projects worth about of the Nakhchivan Autonomous 6.9 million Dollars as part of the Republic are especially favorable for Strategic Roadmap for the these purposes. The country’s wind Development of Public Utilities (Electric energy potential is 350 megawatts. and Thermal Energy, Water and Gas). - Solar Panels

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Key players (Public and private sectors) 1- State Agency on Alternative and Renewable Energy Sources (SAARES) 2- SNC-Lavalin Atkins 3- IEA 4- French company TOTAL

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