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Azerbaijan starts shipping Shah Deniz Gas to Europe

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At the very end of 2020, Azerbaijan started shipping commercial natural gas from the Shah Deniz field to European countries through the Trans-Adriatic Gas Pipeline (TAP), media outlets reported, quoting SOCAR.

Azerbaijani gas reached Europe through pipelines for the first time ever. Having been integrated into the Italian network back in November, TAP, the last segment of the Southern Gas Corridor (SGC), delivered the first gas from Melendugno to Italy via SNAM Rete Gas (SRG) and from Nea Mesimvria to Greece and Bulgaria via DESFA on December 31.

The direct pipeline connection to Europe, the world’s largest importer of natural gas, created the opportunity for Azerbaijan to diversify its energy exports. This will benefit the country, helping it move towards greater economic autonomy.

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SOCAR President, Rovnag Abdullayev, praised December 31 as a historic day, expressing his appreciation and thanks to the partner countries, companies, experts and colleagues who had been involved in the TAP, Shah Deniz-2, and Southern Gas Corridor projects and contributed to the unprecedented delivery of Azerbaijani gas to the European market. “I would like to thank financial institutions for propping up the project and the residents of the communities where the pipelines pass”, he said.

In addition, Abdullayev congratulated both the people of the European Union and the people of Azerbaijan “on behalf of SOCAR, a shareholder in all Southern Gas Corridor segments, and Azerbaijani oil workers who have accomplished this historic mission”. “I warmly congratulate Azerbaijan on behalf of President Ilham Aliyev, the architect and driving force of the great project,” he said.

As the SOCAR president stated: “The final investment decision was taken seven years ago. It was followed by the signing of 25-year gas agreements with Europe’s gas transport companies Although some felt doubtful of success, we have finalized the construction of three 3,500-kilometer interconnected gas pipelines, enabling Europe to receive Azerbaijani gas for the first time in history.”

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“Natural gas extracted from the new source and transported via the alternative route will bolster Europe’s energy security,” he added by highlighting the fact that “the EU gas production has declined, which creates a need for more gas in the market. In this context, Azerbaijani gas will satisfy this demand, thus making the country more strategically important to the Old Continent.”

Speaking about the newly commissioned pipeline, Luca Schieppati, TAP’s Managing Director, touted the day as historic for “our project, the host countries and Europe’s energy landscape”. He stressed the fundamental role of TAP in the continent’s gas network, adding that “it contributes to the energy transition road map and offers a reliable, direct, and cost-effective transportation route to south-east Europe and beyond”.

In the summer of 2021, Azerbaijan will enter the second stage in market research to further expand TAP and increase its capacity to 20 billion cubic metres.

TAP is a 878-km cross-border pipeline which allows natural gas from the giant Shah Deniz gas field in Azerbaijan’s sector of the Caspian Sea to flow into Turkey, Bulgaria, Greece and finally Italy. The route runs from the Greek-Turkish border (near Kipoi) to the southern coast of Italy after crossing Greece, Albania and the Adriatic Sea.

Installing extra interconnectors may translate into more gas shipments to Southeast Europe via the newly commissioned pipeline. Take, for example, Bulgaria which is supposed to bolster energy security by importing 33% of its natural gas needs from Azerbaijan. Thanks to TAP, the country will see higher natural gas penetration on the ground. In addition, the fact that the SCG segment stretches through Greece, Albania and Italy can help Azerbaijan to transport gas to other European countries.

TAP, the strategically vital leg of the SCG mega-project, seeks to provide Europe with reliable access to the new natural gas source, diversify its supplies and achieve greater decarbonization.

TAP’s shareholding is divided among SOCAR, BP and SNAM, with a 20% stake each, Fluxys with a 19% holding, Enagas with 16% and Axpo with 5%.

Azerbaijan

Location, location? Not any more. Israel, Azerbaijan and the globalisation of entrepreneurship

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Last month, I became the first Israeli businessman to sign a memorandum of understanding with the Azerbaijan Investment Company, the sovereign investment arm of the Azeri government, on the historic occasion of the opening of the Azerbaijan Trade and Tourism Office in Tel Aviv. The projected agreement will promote strategic cooperation in the field of investment by the Government of Azerbaijan in OurCrowd’s portfolio, while OurCrowd will encourage startups to establish a presence in Azerbaijan, writes Jon Medved.

Why is OurCrowd interested in Azerbaijan? Because it’s the future.

Our modest memorandum is a small step in the march toward the true globalization of entrepreneurship. The Azeri government has wisely seized the opportunity to be part of the innovation investment revolution.

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The entrepreneurs and the investors of the future will come not just from Silicon Valley, or Midtown Manhattan, or the City of London. They will come from anywhere, because the world has shrunk to the dimensions of a Zoom screen. The innovators from these areas are aware of the urgent issues that pose the next big challenge for the rest of the world – not just the standard problems of rich, affluent western nations where so much technology is currently located and directed.

The people who make California such a high tech hotspot are not just the local population but the newcomers who bring their skills from across the globe. More than half of the startups founded in Silicon Valley between 1995 and 2005 had at least one immigrant founder and many of its flagship brands are headed by immigrant executives. All the key figures in the development of the Moderna vaccine against Covid-19 came from outside the US. The Pfizer-BioNTech vaccine was developed by Turkish immigrants to Germany. Innovation thrives when different cultures and educational systems encounter each other. The blending of experience and different ways of thinking produce innovative approaches to problems. The cultural mix provides the technical color that separates startups from monochrome multinationals, like the diversity that marks out boutique hotels from bland international chains.

So in this era of remote working and electronic deals, why not connect with these innovators in their home locations?

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From Menlo Park to Berlin’s Torstrasse and Tel Aviv’s Rothschild Boulevard, entrepreneurship has been guided by the old real estate adage: Location, location, location. Silicon Valley became the Mecca of megabytes as the new priests of tech and their acolytes made the pilgrimage to the center of the new tech world. No longer.

Covid has redrawn the innovation map. Location really doesn’t matter anymore. There is no map – just an infinite variety of instantly accessible people with an infinite variety of skills, cultures and education. With the globalization of entrepreneurial activity, the next big companies can come from anywhere in the world.

My company is all about democratizing access to the private investing asset class. We are not just committed to helping the wealthy citizens of rich countries write checks, but to truly making access to capital global. Entrepreneurs will come from anywhere and investors should come from anywhere.

In an interconnected world, where you can complete a venture deal with Brazilian or Japanese venture funds you will never meet because it’s all done over Zoom, why not Azerbaijan – either as investors or as entrepreneurs?

From Jerusalem, we became interested in Azerbaijan because it has become such an important strategic ally of Israel and a major oil supplier. The positive and warm treatment by Azerbaijan of its small Jewish community and its ties to Israel demonstrate how Muslims and Jews, who thrived together during the Golden Age, can cooperate to forge a new future.

Central Asia, largely ignored by the business world, is a place to watch. Its strategic location, natural mineral resources, growing economic influence and fast-developing educational institutions make me think it will be the next big growth spot for tech and entrepreneurship. It represents a market that has been woefully underserved by the tech investment community. My colleague Ori Sobovitz, who heads our Government Relations team, correctly identified Azerbaijan as a timely opportunity: an oil-producing country with a sovereign wealth fund that has never invested in venture capital before.

The Israeli experience provides a useful guide for such countries to take their first steps in high-tech investment.

When I came to Israel and raised money for my first startup, there was not a single venture capital fund. Most people are not aware that the supercharged blossoming of innovation in Israel has essentially occurred in just three decades. That’s the blink of an eye. Three decades from now, alongside Silicon Valley, New York, China, Israel, London and Berlin, other countries will have caught up and be participating – including many in Africa, Latin America and Central Asia. 

We are excited to be doing this with our new friends in Azerbaijan. We hope that by helping to develop the high-tech ecosystem in Central Asia, we will also be helping the rest of the world.

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Could Azerbaijan’s Free Economic Zone catalyze the Caucasus’ prosperity?

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Over the past several decades, international commerce has seen the blooming of several important global business hubs. From Hong Kong to Singapore, to Dubai, the common denominator of all these cities was a commitment by leaders to open their economic systems to the world--and make them as inviting as possible to the rest of the globe, writes Luis Schmidt.

Now that companies and investors have seen such centers of business thrive in Asia and the Middle East, it seems that it is the Caucasus' turn to shine.

Back in May of 2020, the Azerbaijani government unveiled plans for its new free trade zone, to be called the Alat Free Economic Zone (FEZ). The 8,500,000 square meter project was announced as part of the emerging trade and logistics hub in the Alat settlement located along the Caspian Sea coast.

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Plans for Alat had been in the works for years. The law pertaining to the FEZ, delineating its special status and regulatory policies, was affirmed by the country’s parliament back in 2018. Work on the Zone’s construction began shortly thereafter.

With the opening of the FEZ to foreign business now imminent, Azerbaijan’s leadership is now inviting the world to come to Alat.

There are a few key drivers behind the brand new hub along the Caspian. The first factor is the long-term strategy adopted by the Azerbaijani government to extend the country’s economy into information industries and diversify it away from the energy sector, traditionally Azerbaijan’s most cash-generating field. “The idea of establishing the Alat Free Economic Zone is based on our policy. In particular, the work done to develop the non-oil sector in recent years has given an impetus to the establishment of this zone,” President Ilham Aliyev said in an interview with Azerbaijan Television following the groundbreaking ceremony of Alat Free Economic Zone. “We saw that investment in the non-oil sector was made more by the state than local companies. Foreign companies tended to invest more in the oil and gas sector,” said Aliyev. The president concluded he is confident the Alat project will be instrumental in expanding the non-energy sectors.

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The second important factor in the FEZ’s establishment is the creation of incentives for Foreign Direct Investment (FDI) into Azerbaijan’s economy. The law governing Alat’s administration provides very attractive conditions for investors. This includes a special tax and customs regime to be applied for the companies operating within the free economic zone. No value-added tax will be imposed on the goods, works, and services imported to the zone, and will also receive a full exemption from customs fees. “This is a very progressive law that fully meets the interests of both our state and investors. This is very important. Because if there were any uncertainties for investors in the legislation, of course, it would not be possible to attract them here,” President Aliyev told reporters in a July 1st interview, noting that the COVID pandemic has also increased the demand for seamless, unfettered pathways to grow companies and international business activity.

The FEZ’s framework is specifically geared toward the needs of start-ups and individual entrepreneurs. Speaking at Azerbaijan's small business confederation, the ANCE, the group’s president Mammad Musayev told listeners how essential Alat would be for developing the country’s business environment. "Work has already begun on launching the activities of the Alat FEZ, meetings with investors are being held. We are ready to devote time to every entrepreneur who wants to work with us," said Musayev.

Finally, the Alat FEZ is uniquely situated both geographically and infrastructurally, to provide a world-class business platform. The Baku International Sea Trade Port, also known as the Port of Baku, is currently the most developed structure in the Alat project. The port already has a cargo capacity in the tens of millions of tons and is still expanding. Currently, the transportation hub links Turkey to the west, with India to the south, as well as Russia and other Northern European nations. An airport to be situated alongside the zone is already in the planning stages. “The fact that the North-South and East-West transport corridors pass through the territory of Azerbaijan, as well as its proximity to large markets, will increase the economic efficiency of the FEZ and give it the opportunity to serve the markets of Central Asia, Iran, Russia, Turkey and the Middle East,” said ANCE president Musayev. Administratively, the Alat Business Services Center will provide licenses, visas, and other critical services to the firms and individuals operating in the FEZ.

The progress attained by Azerbaijan in the Alat project has shown a firm commitment to moving the country towards establishing itself as a knowledge-based economy, and further modernizing its economic system.

If it can meet its expectations, the Alat FEZ will spell an economic boom not just for Azerbaijan, but for the entire Caucasus region.

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Azerbaijan keeping strong in achieving '2030 Agenda' in South-Caucasus despite challenges

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As being one of the rarest countries Azerbaijan achieved positive results at the successful implementation of “Millennium Development Goals” of UN under the supremacy of great leader Heydar Aliyev from 2000, and for the contribution to tolerance, multiculturalism, stimulating and assuring gender equality, diminishing poverty in a short term, retaining health of people, raising education standards of population, ameliorating environment, writes Mazahir Afandiyev (pictured), member of the Milli Majlis of the Azerbaijan Republic.

Mazahir Afandiyev

Azerbaijan met many of the MDGs, including halving extreme poverty and hunger (reached in 2008), achieving universal primary education (attained in 2008), eliminating gender disparities in primary and secondary education and reducing the spread of certain deceases. That is the main reason the President of Republic of Azerbaijan Ilham Aliyev and our country were gratified with “South-South” award in 2015 due to policies that aimed to realize MDGs successfully.

This award is considered one of the essential awards that is introduced to the countries made significant progress at the realisation of MDGs.

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In October 2016, the President of Azerbaijan signed a decree establishing the National Coordination Council for Sustainable Development (NCCSD) chaired by the Deputy Prime Minister to also become an active participant of 2030 Agenda.  This marks a significant step towards integrating Sustainable Development Goals (SDGs) into national development agenda in Azerbaijan. Policy documents and roadmaps have been developed within NCCSD has already supported Azerbaijan's development trajectory to support its ambitions toward SDGs.

As a result of intensive consultations with various stakeholders within and outside of the government, 17 SDGs, 88 targets and 119 indicators were deemed a priority for Azerbaijan. Due consideration is given to the “Leaving no one behind” pledge of the 2030 Agenda and the government will serve to improve the economic and social welfare of the country as a whole, including everyone living in our country, in the spirit of strengthened global solidarity with a special focus on addressing the needs of underprivileged sections of society.  Azerbaijan has already submitted 2 Voluntary National Review (VNR) on the country’s Sustainable Development Goals at High-Level Political Forum (HLPF) at the UN headquarters in New York, USA.

Azerbaijan is the first country in the region and CIS area to submit its third Voluntary National Review (VNR). The establishment of a just, equitable and inclusive model of sustainable development for everyone is one of the key priorities for the Republic of Azerbaijan, mentioned in the 3rd VNR. The National Coordination Council on Sustainable Development and the Ministry of Economy lead VNR process with the support of UNDP country office through the consultation with various stakeholders including the parliament, line ministries, public institutions, NGOs, private sector and academic institutions.   

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Azerbaijan is entering a strategic phase in this new post-pandemic and post-conflict era which spans from 2021 to 2030. Acknowledging global trends and challenges, the Government of Azerbaijan sets the country's long-term development vector and pathways to socio-economic and environmental development through five corresponding national priorities (approved by Presidential decree) for the subsequent decade. These priorities aligned with Azerbaijan commitments under the 2030 Agenda.

Despite the challenges to monitor and measure the success of global goals, the reports introduced by countries allow to follow the implementation process in international levels. The Sustainable Development Report 2021, one of the most important report to monitor the implementation processes, is the seventh edition of independent quantitative report on the progress of UN Member States towards Sustainable Development Goals (SDGs). The report for 2021 has a special focus on the recovery from the COVID-19 pandemic and the decade of action for the SDGs.

Azerbaijan scored the best results among Caspian Sea and South Caucasus countries evaluated in the Sustainable Development Report 2021, has ranked 55th among 165 countries with an overall index score of 72.4, to the Sustainable Development Goals (SDG) adopted by the United Nations. The country of 10 million people demonstrated a strong commitment to all seventeen goals given the overall indicators outlined in the document. I also would like to mention that this index is about 70.9 among countires in Eastern Europe and Central Asia.

Beside major succes in implementation of SDGs in the world, global crises caused by the pandemic of COVID-19, since early 2020, can compromise the world commitment to the 2030 Agenda for Sustainable Development. The Sustainable Development Report 2021 clearly shows a unique pattern of interconnectedness between SDGs that can be related to COVID-19 consequences.  The SDG4 (Quality  Education) is the main goal has decreased in success in the world and Azerbaijan too.

Nevertheelss, as the result of President Ilham Aliyev’s strategic view of the fight against coronavirus, Azerbaijan is in track and maintaining achievement in SDG1 (No Poverty) and SDG6 (Clean Water and Sanitation), also moderately improving on SDG 3 (Good Health and Well-being), SDG7(Affordable and Clean Energy), SDG 13 (Climate Action), and SDG 11 (Sustainable Cities).

Moreover, I would also like to note that Azerbaijan is the most sensitive country in the South Caucasus to the negative consequences of climate change in terms of the diversity and geographical location of its climate zones. In this regard, the achievement of SDG13 (Climate Action), which is closely linked to all other goals of the agenda, is an important goal for our country, and failure here may hinder the achievement of SDG6 (Clean Water and Sanitation) and SDG15 (Life on Land).

Unfortunately, Armenia’s three-decade occupation extensively damaged the ecosystem, wildlife and natural resources in and around the occupied territories of Azerbaijan. Armenians also resorted to large-scale acts of ecological terror in regions they had to leave under the trilateral November peace deal that stipulated the return of Azerbaijan’s occupied territories. Moreover, every year, Armenia constantly polluted transboundary water resources with chemicals and biological substances. This, in turn, undermines the success of the SDG6. 

In 2006 the UN General Assembly Resolution A/RES/60/285 on “The situation in the occupied territories of Azerbaijan” had also called for an assessment of and counteraction to short and long-term environmental degradation of the region. Also, in 2016, the Parliamentary Assembly of the Council of Europe adopted Resolution No.2085 titled “Inhabitants of frontier regions of Azerbaijan are deliberately deprived of water”, demanding the immediate withdrawal of Armenian armed forces from the concerned region and allowing access by independent engineers and hydrologists to carry out a detailed survey on the spot. All these facts shows the general damage on environment of Azerbaijan as a result of illegal occupation for years.

Nevertheless, 30 years of ecological terror have ended with the liberation of the Azerbaijani village of Sugovushan, and work is underway to ensure ecological balance and create a sustainable, clean environment in the Tartar, Goranboy and Yevlakh regions.

As a result of the victory of the victorious Azerbaijani Army, 30 years of illegal occupation were ended, thus, for the first time in years, our country has made progress towards the goal of SDG16 (Peace, Justice and Strong Institutions). 

I am confident that as a result of the peace and stability to be established by our country in the South Caucasus, permanent cooperation (SDG17) will be established, and the goals in common to the region will be successfully implemented.

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