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caspian weekly roundup

Caspian Weekly Roundup

Author:Caspian Policy Center

Sep 18, 2018

Energy

EIB Funding Remains Conditional on TAP Meeting Environmental Standards Financing by the European Investment Bank (EIB) for the Trans Adriatic Pipeline (TAP) remains dependent on TAP meeting the EIB Environmental and Social Standards. TAP’s shareholders and a consortium of banking institutions are expected to provide funding of the project. The Board of Directors of the EIB approved the provision of 1.5 billion euros for TAP on February 6, 2018. The signature of the EIB loan has yet to be signed, according the Bank. TAP, part of the Southern Gas Corridor project, is worth 4.5 billion euros and a European Union Project of Common Interest, making it a priority energy project within the EU. IEAE, Russia Sign Agreement on Uranium Transportation to Kazakhstan The International Atomic Energy Agency and Russia have signed an agreement on the transportation of low enriched uranium (LEU) and equipment critical for the functioning of the IAEA’s LEU Bank in Kazakhstan. The signing occurred between Oleg Kozen, Deputy General Director of Logistics of Techsnabexport JSC, and Mark Bassett, IAEA LEU Bank Project Executive, on September 17 at the IAEA General conference in Vienna. The LEU Bank, located at the Ulba Metallurgical Plant in Oskemen, Kazakhstan, is a physical reserve of up to 90 metric tons of LEU to make fuel for a light water reactor, the most commonly used nuclear power reactor in the world. The LEU Bank provides IEAE member-states assurance in the event of a disruption to existing fuel supply arrangements for LEU. The reserve will be used only if there is a crisis in the global uranium market. IAEA will pay for the acquisition, delivery, and maintenance of the LEU, while Kazakhstan will be responsible for costs related to the direct storage of the LEU, including electricity and heating supply fees, office space rental fees, and costs of maintenance of the personnel provided by Kazakhstan. BP Acquires 61% Stake in PSA on Azerbaijan’s Gobustan Onshore Project British Petroleum bought a 61 percent stake in the production sharing agreement (PSA) on the Gobustan onshore field in Azerbaijan. The stake has been acquired from the Commonwealth Gobustan Limited company, a subsidiary of the British Arawak Energy company. Commonwealth Gobustan is also a member of the Vitol Group company. SOCAR has approved the contract that will permit BP, as an operator, to drill one exploration well to assess the potential production of the field. The well is planned to be drilled in the second half of 2019. Oil Production to Increase at Kazakhstan’s Largest Field The Kashagan field will increase production to 370,000 barrels per day after repairs that are scheduled to begin in Spring 2019. As of September 14, the production at Kashagan field is 349,000 barrels per day. Production at Kashagan was unstable this year due to both scheduled and unscheduled repairs. Kyrgyz Officials Attend International Energy Industry Expo 2018 in Taiyuan A delegation from Kyrgyzstan will attend the International Energy Industry Expo 2018 in Taiyuan, Shanxi Province, China from September 16 to 18. China’s Ministry of Commerce, Ministry of Science and Technology, and the People’s Government of Shanxi province organized the event. High-level officials and energy experts from China, Russia, Poland, Ukraine, Ireland, France, Korea, the United States, Hungary, and Kyrgyzstan were invited to attend. Companies of Shanxi province will present their progress and inventions in energy, environmental protection, energy conservation, innovative technology, emissions reduction, and the coal, chemical, mining, processing industry. The delegation from Kyrgyzstan will be led by Kubanychbek Nurmatov, a member of Kyrgyz Parliament and the Kyrgyzstan-China friendship group. Other members of the delegation included Governor of Jalal-Abad oblast Kyianbek Satybaldiev, Mayor of Kara-Kul Ilyas Erkeyev, Head of Jalal-Abad interregional department of the Kyrgyz Ministry of Economy Saparbek Bagyshev, Director of Hydroproject Planning and Survey Institute Janybek Jancharov, Adviser of the Jalal-Abad oblast governor Anara Nurmatova, Investments Adviser of the Jalal-Abad oblast governor Tian Hue, and Adviser of the member of Jogorku Kenesh Zamirbek Imanbekov. Mayor of Kara-Kul Ilays Erkeyev said, “Our city can be called energetical. There is one of the major hydroelectric power plants in Central Asia - Toktogul HPP in our city, which generates over 80% of all the electricity in the country. Today most countries in the world are upgrading their energy industry. Employment and introduction of modern technologies in the energy field will favorably influence the development of this branch.” Tajikistan Opens Hydroelectric Power Plant in Murghab President of Tajikistan Emomali Rahom launched the hydroelectric power plant (HPP) “Tajikistan” in Murghab on September 13. At the launching, Rahom announced the HPP would be renamed from “Oksu” to “Tajikistan.” The HPP has a capacity of 1.5 thousand kWh and will serve some 14,000 Murghab residents who have been living without electricity for approximately two years. The German Development Bank (KfW) financed the modernization of the HPP. The initial plan was to increase the capacity to 800 kWh, but after a second study, German specialists decided to increase the capacity to 1.5 thousand kWh. The KfW has allocated €11 million for the project.

Security

Azerbaijani Military Begins Large Scale Exercises Azerbaijan’s Army began large scale exercises on Monday that will continue for the rest of the week. The training will involve over 20,000 military personnel, 200 armored vehicles, 120 rocket and artillery mounts, multiple rocket launching systems, and 30 aircraft. Erdoğan Visits Baku Turkish President Recep Tayyip Erdoğan visited Azerbaijan on September 15th for ceremonies marking the 100th anniversary of Baku’s liberation. Erdoğan and Azerbaijani President Ilham Aliyev also held a one-on-one meeting to discuss steps to further their strategic partnership. Both leaders expressed satisfaction with the state of their bilateral relations and cited the upcoming liberation parade as a “landmark event in the history of Azerbaijan-Turkey bilateral relations.” Kazakhstan and Kyrgyzstan Formalize Their Border The Majilis of the Parliament of the Republic of Kazakhstan approved the Draft Law on the Ratification of the Agreement between the Republic of Kazakhstan and the Republic of Kyrgyzstan last week, ratifying the agreement on border demarcation the two countries reached in December. The move is an important step towards completing international legal formalization of the border, something critical to ensuring Kazakhstan’s national security according to Kazakhstan’s First Deputy Minister of Foreign Affairs Mukhtar Tleuberdin. Russia, Turkey Agree to Create Buffer Zone in Syria's Idlib Russian and Turkish troops are to enforce a new demilitarized zone in Idlib from which radical rebels will be required to withdraw, Russian President Vladimir Putin said on Monday after a meeting with his Turkish counterpart. Russia, the biggest outside backer of Syrian President Bashar al-Assad in his fight against rebels, has been preparing for an offensive on Idlib, a city that is controlled by rebels and is home to about 3 million people. But after Putin’s talks with Turkish President Tayyip Erdogan, who has opposed a military operation on the rebels in Idlib, Russian Defence Minister Sergei Shoigu was quoted as saying by Interfax new agency there would not now be an offensive. Putin told a joint news conference with Erdogan the agreement was that all heavy weapons be withdrawn from the buffer zone, and that what he called radically-minded rebels, including the Nusra front, would have to pull out of the zone. Peace Treaty with Japan: Putin Held Talks with Shinzo Abe Within the framework of Eastern Economic Forum that came to an end on September 13, the leaders of Russia and Japan held talks, the main focus of which was the peace treaty between the two countries. Despite the fact that both parties have their own limitations when it comes to a peace treaty, both Putin and Abe agree that it is necessary to seek consensus on the issue. Japanese Prime Minister Shinzo Abe voiced Tokyo’s position, recalling that the territorial dispute over the Kurile Islands needs to be resolved before Japan agrees to sign a peace treaty.  He also noted that Russia and Japan ought to end mistrust and implement joint economic activities in the Southern part of the Kurile Islands in order to make the peace treaty possible. Russian President Vladimir Putin believes that the two countries should make a peace treaty without any preconditions before the end of the year. The Kuril Islands issue remains the sticking point since after WWI. The islands were handed over to the Soviet Union while Japan claimed the four southern islands. In 1956, the two countries signed a declaration that ended the state of war and reinstated diplomatic relations, however, a peace treaty has never been signed. Moscow has stated many times that Russia’s sovereignty over the islands could not be questioned Pashinyan Gives Russia Specialists Access to US abs in Armenia Russian specialists were permitted to enter American labs in Armenia, and which research biological materials, Armenia’s Prime Minister Nikol Pashinyan told Kommersant newspaper of Russia. “Russian specialists were allowed to enter the laboratories literally ten to fifteen days ago, with my personal instruction,” he noted. Pashinyan clarified that these labs are completely overseen by the Armenian authorities. “We [Armenia] are ready for cooperation,” the Armenian PM added. “And Russian specialists have already been there and become convinced that there is nothing terrible in those laboratories.” “It [these labs] can in no way be used against Russia,” Nikol Pashinyan concluded. “On the contrary, we invite Russian specialists, and we are ready to discuss the matter of joint use of those laboratories.”

Economy

Rates of Dollar, Euro Against Uzbek National Currency Show Record Growth The Central Bank of Uzbekistan has published new currency rates, which will be effective from September 18, Uzbek media reported. This week, exchange rates of all the major foreign currencies used in Uzbekistan - the US dollar, the euro and the Russian ruble – against Uzbek national currency, the soum, showed uncharacteristic growth. The US dollar, which shows positive dynamics for the sixth week, rose by a record 176.83 soums. Earlier, on average, it increased by 20-30 soums. From Sept. 18, $1 will cost 8,039 soums. Euro this week increased by 266.16 soums and reached 9,347.75 soums. IDB Finances Major Telecommunications Project in Turkmenistan The Ministry of Communications of Turkmenistan has launched a large-scale project entitled "Development of telecommunication networks of Turkmenistan", the "Neutral Turkmenistan" newspaper wrote. The funds of the credit line amounting to $273 million allocated by the Islamic Development Bank (IDB) will be used to finance the project. It is expected that the tender documents will be issued on the eve of the international exhibition "Turkmentel – 2018", which will be held on October 10-12, 2018 in Ashgabat. The priority direction of the project is development of mobile communication. "Given the growing demands of the population, the national mobile operator "Altyn Asyr" will provide 100-percent coverage of the country with this type of communication, including 3G, 4G, and also 5G-Internet in the near future, and will provide other services. To this end, more than 600 units of basic equipment will be purchased," the message says. Astana Financial Center, CBIRC to Strengthen Co-Op in Banking, Insurance Supervision The Astana Financial Services Authority (AFSA) of the Astana International Financial Centre (AIFC) and the China Banking and Insurance Regulatory Commission (CBIRC) have signed a Memorandum of understanding to strengthen cooperation in the sphere of banking and insurance supervision, Kazakh media reported, referring to the press service of the AIFC. The signing ceremony took place during the official visit of the CBIRC delegation to the AIFC. The Memorandum was signed by the Chairman of CBIRC Guo Shuqing, the Governor of AIFC Kairat Kelimbetov and the Managing Director, Chief Policy Officer of AFSA Mukhtar Bubeyev. The parties agreed to develop cooperation in the field of supervision of cross-border banking and insurance institutions in both jurisdictions and to facilitate the exchange of relevant information between CBIRC and AFSA. Tax Legislation of Azerbaijan Expected to Undergo Serious Changes New amendments to the tax legislation may be adopted in Azerbaijan by the end of the year, Samira Musayeva, General Director of the Tax Policy Department of the Ministry of Taxes of Azerbaijan told Trend. She noted that the changes are aimed, among other things, at reducing the tax burden, simplifying tax administration, and suppressing tax evasion. One of the proposals is the introduction of a single rate on the income of individuals. Musayeva said by the instruction of the head of state, the authors of the bill focused on reducing the tax burden in this area. Currently, the income tax in Azerbaijan amounts to 14 percent, and another 26 percent (22 percent - employer, 3 percent - employee) fall to the share of social contributions to the State Social Protection Fund. Currently, she said, the package of proposals is under consideration by the government. AmCham Allowed the Complete Withdrawal of American Companies from Russia Head of the American Chamber of Commerce in Russia, Alex Amb. Rodzianko, said that there is a legitimate threat of a complete withdrawal of American companies from Russia in the event of a new set of sanctions imposed by Washington. According to him, the sanctions would actually force all American companies to leave Russia because they forbid work with banking systems, trail transportation, the purchase of gas – this makes production in Russia de facto impossible. Rodzianko stresses that currently businesses continue to work, grow and even invest, however, the threat of new sanctions exists, and it might result in companies being forced to shut down. Source: ASIA-Plus, AzerNews, Eurasianet, Gazeta, Kazinform, Kabar, MarketWatch, News.Az, Newsfeed, Reuters, Ria, Trend News Agency, and Washington Post.

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