Ilham Aliyev attended plenary meeting held as part of World Economic Forum
19 January 2023, 19:15
President of the Republic of Azerbaijan Ilham Aliyev attended a plenary meeting on "Eurasia's Middle Corridor: From Pathway to Highway" held as part of the World Economic Forum in Davos.
The head of state took questions from the moderator.
Moderator: First, I would like to go to President Aliyev and Prime Minister Garibashvili. We have seen a series of multi-party agreements around the Middle Corridor recently. So, what can we expect at the intergovernmental level along this axis in the coming year or beyond that? Let me start with you, Mr. President, and then I will go to you, Mr. Prime Minister.
President Ilham Aliyev: Thank you. One of the advantages of the Middle Corridor is that the countries involved in this vast project have good relations among themselves. This is one of the main prerequisites for success in any multinational initiative. Azerbaijan has excellent relations with its neighbors to the West - Georgia and Turkiye and to the East - Central Asia. And being a natural geographical bridge between East and West, we have mainly invested in transportation infrastructure in the previous years. All the necessary infrastructure facilities in Azerbaijan are ready to receive more cargo. Our seaport, which has a capacity of 15 million tons, will be expanded to 25 million tons. The budget has already been allocated because we expect a growth in cargo for particular reasons, including the difficulties of transportation through the traditional Northern route. We have already seen the diversion of a significant volume of cargo from Central Asia, and this is only the beginning. Also, starting this year, we began the transit of oil from Kazakhstan, not only from Turkmenistan, which has been the case for many years, with the potential to use this new corridor for hydrocarbons. Therefore, we now need closer cooperation between all the countries involved - Central Asia, Caucasus and Europe - to work actively on customs administration and have more or less a single window approach and tariffs policy. We need to make this route attractive from the point of view of the absence of other routes and attractive from a commercial point of view. And by the way, when we started our meeting, I noticed that we sat the same way our pipeline goes.
Moderator: But I am from the Czech Republic.
President Ilham Aliyev: No, no. The pipeline starts in Azerbaijan - Azerbaijan, Georgia, Turkiye, and Europe.
EU Commissioner for Budget and Administration Johannes Hahn: We are working on reverse flow. Thank you.
Moderator: Back to you, Mr. President, and then to you, Mr. Prime Minister. On the governance of the project, if you can share it, there are some ideas in the future on how it will look. And then also on the market. What are your thoughts about how this is, of course, not only a tunnel but it's an ecosystem, maybe that is benefiting and creating a new regional market?
President Ilham Aliyev: Yes, I fully agree with the comment of Madame Ebru. Because she was right in saying that it is not just a corridor, and as the Commissioner said, it is not a tunnel. And we have big expectations. Of course, becoming a transit country, in the sense of today's reality, is essential. But for us, the most important thing is jobs and local production. For that purpose, we are working very hard to diversify our economy. And transportation will not only help us to diversify our exports, as we will export services. But, at the same time, sitting along the route of the Middle Corridor and the North-South Corridor creates additional opportunities for business in Azerbaijan.
Soon there will be the inauguration of a free zone in Baku, just next door to the seaport. And we hope that this free zone will be a place of manufacturing and the place the companies will deem appropriate to invest in. Improvement of business climate, of course, is one of the main factors of success because all the countries in the world, even the most developed ones, need additional investments. And here, more than a business climate is needed. We're returning to where we started and what Prime Minister Garibashvili said about the relationship between the countries. It is a unique situation - perhaps the friendliest environment on a global scale - the relationship between Azerbaijan and Georgia, Azerbaijan and Turkiye, Georgia and Turkiye and the trilateral cooperation. We have several trilateral cooperation formats - ministers of foreign affairs, defense, and economy. There also was the leaders' summit, and we started sharing the profit. We started to understand clearly that there should be a balance. We started with energy projects – the balance between producers, transit countries and consumers. And we managed to create a win-win situation, and thus, a balance of interests was preserved.
The railroad connections we built relatively recently, which we will expand now from Azerbaijan, Georgia, Turkiye and down to Europe, were inspired by the successful implementation of our oil and gas pipeline projects. So, on this side of the corridor, everything is settled. Now what we need, and again, I agree with Madame Ebru that there should be a steering committee. Sort of a management board of all countries involved - Central Asia, Azerbaijan, Georgia, Turkiye, and European partners. All the transportation infrastructure is in place. For instance, we have the largest trade sea fleet in the Caspian, with 53 vessels. The seaports and railroad connections between Turkmenistan, Kazakhstan, Azerbaijan, and Central Asian countries. They are, as you may know, not well-connected.
And there are new projects, for instance, a project which China has just initiated - the China-Kyrgyzstan-Uzbekistan railroad. The project will eventually come to the Caspian and then further down in our direction. But also, it is important to work not only on transportation and advantages of the East-West but also of the West-East. So far, the focus has been on bringing cargo from China to Central Asia and across the Caspian to Europe. But we also need to consider how to have the cargo in the opposite direction. And for that, the business climate in the opposite direction should also be in line with our targets.
Moderator: Since I have you here, Mr. President, I need to, of course, ask you about energy as well. Specifically, this is a webcast. So, there's also this value of updating the general public on where we are. Well, what is the state of play? I know you've boosted the delivery of energy to Europe. I mean, it's a miracle, frankly. But if you could update us on your thinking for this coming year and strategically, maybe for the next decade, both on gas and also if you could tell us about the plans of Azerbaijan, which I know you have on green energy.
President Ilham Aliyev: With respect to natural gas, as soon as we got the request from European Commission, we started immediately to work in different directions. First, a physical increase of production and then efficiency, reduction of losses, and looking where else we can save gas, which we use for domestic purposes, and to channel it to the European market. In 2021 our export to the EU market was something more than 8 billion cubic meters. This year, it will be at least 11.6 billion cubic meters of the total 24 billion cubic meters. So, the growth is very rapid. The MoU, signed between European Commission and Azerbaijan this summer, presumes that by 2027 we will double the supply. So, the supply to European Union will be minimum at the level of 20 billion cubic meters. For that, there should be more interconnectors in Europe. And one of them was inaugurated late last year – Interconnector Greece-Bulgaria. It enabled us to start supplying Bulgaria and, as of this year, Romania.
At the same time, we need to expand the brand-new facility, which Limak contributed to - TANAP from 16 to 32 billion cubic meters and TAP from 10 to 20 billion cubic meters. As you can imagine, TAP was inaugurated only two years ago. And we thought it was a volume that Europe would need for the long term. But now we need to expand. So, it will be additional financing, and we are ready to do it. We are working very hard to satisfy the growing needs of European consumers.
On green energy, the potential is enormous. The Caspian Sea's wind potential is 157 gigawatts, the onshore potential is 27, and the 10-gigawatt potential is in the territories we liberated two years ago during the Patriotic War. So, almost 200 gigawatts. As the Prime Minister mentioned, last December, we signed an agreement in Bucharest to build the subsea cable from Georgia to Romania, and the capacity of this cable will be four gigawatts. Now the feasibility study is underway. As soon as it is ready, we will think about the financing structure, and, of course, we will need the support of European financial institutions. The agreement signed with Masdar will add four gigawatts of production of wind and solar by 2027 and six gigawatts to come by 2037. An MOU with Fortescue Future Industries provides investments for up to 12 gigawatts of production in Azerbaijan. So, it is a new chapter of our energy policy. Oil is done, and gas is done - electricity, green hydrogen, and all that is in our plans.
Moderator: Thank you. And one more thing, Mr. President. We have about three minutes left, but it is on top of my mind, and Commissioner, you mentioned that many people think that if there is economic integration, there is also more stability and peace. Could you tell us about your relationship with Armenia? What can we expect? How can we have lasting peace from your perspective? Where are we?
President Ilham Aliyev: Two minutes will not be enough to tell the story.
Moderator: But where are we now?
President Ilham Aliyev: We are in the middle of nowhere because, unfortunately, Armenia did not respond to our proposal to sign a peace deal, which will be very simple and based on the fundamental principles of international law. Commissioner Hahn hinted at the absence of Armenia here. He said there are two South Caucasus countries, but there are three. I know whom he meant. But why is Armenia not here? Because Armenia rejected our proposal with Georgia to start a trilateral format of cooperation. I highly value the efforts of my friend Irakli Garibashvili, who hosted a meeting of foreign ministers of Azerbaijan and Armenia, and a Georgian colleague joined that meeting. Our suggestion was for leaders to meet in Georgia. Georgia historically has been where all the neighbors met, but Armenia was not ready for that. And this is one of the potential risks because if three countries of the Caucasus unite their efforts in energy transportation, security stability, and border delimitation, the region will be much safer.
Moderator: I would like to know your general opinion about cargo transportation and transport projects between Azerbaijan and Georgia. What routes are there?
Irakli Garibashvili: We cooperate with Azerbaijan on several projects. One of them is the Black Sea subsea power cable project. In Bucharest, we – the Republic of Azerbaijan, Georgia, Romania and Hungary – signed an agreement and undertook that each of these four countries would invest in the project. We are implementing the Baku-Tbilisi-Kars railway project together with Azerbaijan. A few months ago, Azerbaijan allocated additional funds for the completion of this project.
I also want to talk about the relations between Azerbaijan and Georgia. Our relationships are time-tested, reliable and trustworthy. Together, we have implemented very important and historic projects, oil and gas projects. Now we are implementing this railway project. We will implement many more projects in the future.
Moderator: Mr. Prime Minister, what do you think your prospects are? How can we achieve lasting peace? Also, in addition to this, I know that you had claims regarding both NATO and the European Union. What are your thoughts on this?
Irakli Garibashvili: First of all, when it comes to relations between Azerbaijan and Armenia, Georgia is really a neutral, impartial and objective mediator. As President Ilham Aliyev mentioned, it is in our interest to organize a trilateral meeting. Because this region belongs to us – Azerbaijan, Georgia and Armenia, we can transform this region into a region of peace, progress and stability.