BNE Invest in Azerbaijan
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Content: 3 Top story bne:Invest in Azerbaijan 5 Corporate statement 6 Interview 7 Feature 10 Sector 12 Economics & finance 17 Chart 16 News in brief March 2015 Follow us on twitter.com/bizneweurope www.bne.eu AZPROMO is the main partner of the bne:Invest in Azerbaijan newsletter. www.azpromo.az AZPROMO business forums strengthen ties with European partners On the occasion of diplomatic visits from Slovenia arrived in Baku, and was welcomed by the and the Czech Republic to Baku, the Azerbaijan deputy minister of economic development of Export and Investment Promotion Foundation Azerbaijan, Niyazi Safarov. The two dignitaries (AZPROMO) organised two bilateral investment discussed bilateral relations, and the expansion forums aimed at strengthening ties with its of trade and economic cooperation, before the European partners. Slovenian delegation was received by the head of state and by Minister of Foreign Affairs Elmar On March 2, a delegation led by the president Mammadyarov. During the bilateral business of the Slovenian national council, Mitja Bervar, forum held later at the AZPROMO headquarters, Multilateral strategic Azerbaijan Export & Investment partner Promotion Foundation bne:Invest in Azerbaijan March 2015 Page 2 the foundation's president, Rufat Mammadov, website, "Based on the meeting with the Minister introduced the guests to Azerbaijan's business of Finance, in addition to contacts with other climate and investment opportunities, and representatives, I came to the conclusion that encouraged the Slovenian representatives of the situation was stabilised, that measures to tourism, industry and other sectors to engage decrease inflations were taken, and that all the with their Azerbaijani counterparts. According investment projects would be implemented in to the Azerbaijani state customs committee, their original scope. Absolutely crucial for me trade between Slovenia and Azerbaijan stood at were assurances that loans that had been granted a modest $8.65mn in 2014, consisting mainly of to finance Czech projects in Azerbaijan are not Slovenian exports to Azerbaijan. threatened. I see it as an important condition for further support of our companies on the local The following day, a Czech delegation headed market through competitive financing." by Minister of Industry and Trade Jan Mládek conducted a series of meetings in Baku with While discussions revolved around the EU’s Minister of Finance Samir Sharifov, President Southern Gas Corridor, and increasing exports Ilham Aliyev, the management of SOCAR, as well of oil and gas to Europe and the Czech republic as with Azerbaijani representatives responsible in particular, the Czech delegation also for energy, transport and industry. Trade and participated in a bilateral business forum held investment between the two countries is at the AZPROMO headquarters, where the 32 sizeable, as Azerbaijan accounts for a third of the Czech companies comprising the delegation oil imports to the Czech Republic, while the latter discussed opportunities for investment has invested over $1.2bn in Azerbaijan to date, and trade in agriculture, banking, logistics, and is financing $2bn-worth of infrastructure telecommunications, infrastructure and projects in the Caucasian country. Bilateral trade engineering with their Azerbaijani counterparts. increased by 23% in 2014, up to $1.6bn. Mládek Attended by over 150 businesspeople from was reassured by his discussions with Sharifov both countries, the event was deemed as a that, despite the recent depreciation of the promising step forward that would pave the way manat, the outlook for the currency is stable. for cooperation in energy, road construction and agriculture, and for exports of rail cars and According to Mládek's statement available railway equipment from the Czech Republic to on the Czech Ministry of Industry and Trade Azerbaijan. Multilateral strategic Azerbaijan Export & Investment partner Promotion Foundation bne:Invest in Azerbaijan March 2015 Page 3 Top story Croatia, Montenegro to tap into TAP Croatia and Montenegro have announced plans exploration efforts in the Adriatic Sea, for which to connect to the Trans Adriatic Pipeline (TAP) – a three consortiums – including OMV, Marathon Oil key EU-backed pipeline that will carry Azerbaijani Netherlands and Eni International – on March 12 gas to Europe. filed bids for oil exploration and drilling rights. Speaking from the Budva resort in Montenegro Meanwhile, Croatia's upstream and downstream on the sidelines of the two-day Adriatic Oil & Gas projects are pointing to its leadership in regional Summit that started March 10, the Croatian and energy policy. The country is currently importing Montenegrin ministers of economy, Ivan Vrdoljak a third of its gas demand, estimated at 3bn cubic and Vladimir Kavaric, revealed plans to construct metres a year (cm/y), from Russia, and is hoping a $754mn gas route along the Adriatic sea, which that the new pipeline will alleviate its dependence would be linked to TAP, and which could also on Moscow. distribute to Bosnia-Herzegovina in the future. As part of its upstream efforts, the Croatian "All the countries in the region want to get a link government awarded exploration licenses this to TAP. This is also an opportunity for Montenegro January to consortiums formed by Marathon Oil to profit from gas from our future findings," and OMV, Eni and Medoilgas, as well as to domestic Kavaric said, referring to his country's oil and gas player INA Industrija Nafte. In parallel, the country Multilateral strategic Azerbaijan Export & Investment partner Promotion Foundation bne:Invest in Azerbaijan March 2015 Page 4 is working on a gas pipeline that would connect Its trajectory can facilitate gas supplies to the natural gas terminal on the island of Krk in Southeast Europe, while the ability to double its northern Croatia to Hungary – a scheme that will capacity means that some Western European include Slovenia and Serbia when completed. markets could also receive supplies in the future through Italy. The first gas deliveries through TAP According to Vrdoljak, Croatia has an important are expected to take place in 2019. say in the regional energy strategy, and should express its leadership through inclusiveness. After E.ON and Total sold on their shares in the "The priority projects are not only the LNG gas pipeline in 2014, its shareholding now comprises terminal [on Krk island] but also the pipelines, BP (20%), SOCAR (20%), Statoil (20%), Fluxys while Croatia becomes a country that should help (19%), Enagas (16%) and Axpo (5%). In 2014, this region get a new gas supply route," he said. TAP awarded various bids for onshore pipeline construction in Albania and Greece, and access As the only alternative scheme to Russian gas roads and bridges in Albania, and has announced for the Balkans after the EU aborted the costly a new series of bids in early 2015 for the 105km Nabucco pipeline project in 2013, TAP has portion of subsea pipelines in the Adriatic Sea and turned into a lifeline for the region, of which onshore works in Italy. Greece, Albania and Bulgaria will be the main beneficiaries, but which is also being courted The interest in the pipeline is indicative of the by their northern neighbours Croatia, Serbia, need for stable and affordable gas supplies in Kosovo, Bosnia and Montenegro. The 867km route the Balkans, and of Azerbaijan's importance as will supply 10bn cm/y of gas to Europe in a first the only feasible alternative to Russian gas in stage from the developing Shah Deniz II field off the region. Meanwhile, the infrastructure and Azerbaijan's shores of the Caspian Sea. It will exploration projects announced over the past connect to the Trans Anatolian Pipeline (TANAP) year could pave the way for further supplies from near the border between Turkey and Greece at Central Asia to Europe, and better connect the gas Kipoi, and cross Greece, Albania and the Adriatic distribution networks in Southeast Europe. Sea, before resurfacing in southern Italy. Multilateral strategic Azerbaijan Export & Investment partner Promotion Foundation bne:Invest in Azerbaijan March 2015 Page 5 PASHA Bank PASHA Bank promotes community about our economy, drawing interest in investment opportunities in investing in Azerbaijan and building partnerships for the future." Azerbaijani financial sector Shortly after the seminar in London, PASHA Bank sponsored the Azerbaijan Banking & Since the beginning of the year, PASHA Finance Forum, an event organised by Adam Bank has supported several events aimed at Smith Conferences in Baku on February 4-5. The increasing awareness about the developments forum attracted over 300 representatives from and investment opportunities in the Azerbaijani Azerbaijani public and private companies, as well banking and financial sectors. as of the International Finance Corporation, the World Bank, the Asian Development Bank, and The first such event, a seminar on the "Financial the European Investment Bank. Focusing on the market in Azerbaijan: outlook for 2015", was held finance sector, retail banking, small business in London on January 27. The event attracted financing and monetary stability, the panel also over 60 asset managers, investment bankers, noted that the diversification into sectors like financial journalists and other industry experts. tourism, telecommunications, financial services, Speaking at the seminar, Charles Hendry, British real estate and agriculture would ensure the trade envoy to Azerbaijan, Matthew Bryza, former country's