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Economic Development in Azerbaijan

Government is studying the possibility of construction of a bridge across the Bay of the Baku
Purpose:

-Provide a transport route for industrial zones to avoid busy roads of Baku.
-Provide connection to the Islands that will be converted to tourist zones.
-Ease of congestion in Baku.

Old proposal

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European Commission approves Greece-TAP deal

The European Commission approved the Host Government Agreement between Greece and the Trans Adriatic Pipeline (TAP), allowing the new gas pipeline to enter Europe, the Commission said on its website March 3.

The agreement sets out how TAP will construct and operate the pipeline and defines the respective obligations of the parties. In particular, the agreement provides TAP with a specific tax regime for 25 years from the start of commercial operations.

“The European Commission has found the Host Government Agreement between the Greek authorities and the Trans Adriatic Pipeline to be in line with EU state aid rules,” said the Commission. “The project will improve the security and diversity of EU energy supplies without unduly distorting competition in the Single Market.”

The TAP pipeline is meant to transport natural gas from the giant Shah Deniz 2 field in Azerbaijan to Europe. The approximately 870 km long TAP will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in southern Italy.

“Today’s approval of the TAP agreement is an important step towards completing the Southern Gas Corridor,” the European Commission’s message quoted Maros Sefcovic, vice-president responsible for Energy Union, as saying.

“The Energy Union framework strategy of February 2015 identified this project as a key contribution to the EU's energy security, bringing new routes and sources of gas to Europe,” added Sefcovic. “Just on Monday, the Southern Gas Corridor ministerial meeting in Baku, which I attended, confirmed the determination of all participating countries and consortia to complete this key infrastructure project in time.”

TAP’s construction is expected to begin in mid-2016.

http://en.trend.az/business/energy/2502410.html


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Georgia: Azerbaijan Wins Gas Deal Over Russia, Iran

Gone is the fear of betrayal, and bilateral love, once again, is in the air. Georgia, the strategic crossroads for energy alternatives to Russia, finally announced on March 4 its pick for a supplier of extra gas, and the choice is longtime partner, Azerbaijan. The decision appears to knock both Iran and Russia’s state-run Gazprom out of the running, but still leaves the door open to collaboration between all four countries in other energy spheres.

“We’re glad that the talks ended with success and that we’ve made it to a decision that will deepen our strategic partnership [with Azerbaijan] even more, about which not a single doubt ever existed,” a contented Georgian Prime Minister Giorgi Kvirikashvili declared at a meeting in Tbilisi with Rovnag Abdualayev, president of the State Oil Company of the Azerbaijani Republic (SOCAR).

Abdullayev, in turn, underlined that SOCAR “will continue its support for Georgia’s government;” in particular, by shelling out “various forms of investment” into the country.

The total amount of this “investment” — conceivably, a deal sweetener — is not known, but Georgia did manage to squeeze Azerbaijan’s commercial gas prices down a notch, from $318 to approximately $278-$283 per 1,000 cubic meters. It will receive an additional 500 million cubic meters of gas per year, an amount which Energy Minister Kakha Kaladze now claims “satisfies the market” demand.

That established, Tbilisi appears ready to call it a day with its gassy flirtation with the Russian energy-giant Gazprom. Gone is any talk about the advantages of “diversification” away from Azerbaijan, the source of most of Georgia's gas.

While the talks with Gazprom aren’t yet finished, Kaladze told reporters on March 4, the Georgian government’s “final proposal” to Gazprom is that the two sides leave things as they are — a 10-percent annual cut for Georgia out of Russia’s gas shipments to neighboring Armenia. No date has been announced for the next Gazprom rendez-vous.

But nor will Tbilisi be linking up with Iran on gas. While Iranian gas purchases are “theoretically” possible, Kaladze stated, “today the necessity [for that] does not exist.”

So far, no sign of hard feelings. The spurred Gazprom and National Iranian Gas Export Company have not commented. Armenia, which enjoyed a brief run of celebrity as a possible energy-transit country for gas-shipments to Georgia from Iran, also has not made any remark. :lol:

Georgia: Azerbaijan Wins Gas Deal Over Russia, Iran | EurasiaNet.org

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Italian firm joins project to upgrade Sumgayit ethylene-polyethylene plant

Technip Italy has joined the project for reconstruction of the ethylene-polyethylene plant in Azerbaijan's Sumgayit city.

The Italian company will conduct detailed designing and provide services to support supplies as part of the project.

The relevant agreement on involvement of the company in the reconstruction project was reached between Technip Italy and Azerikimya Production Union of Azerbaijan's state energy giant SOCAR on March 9.

The signing ceremony was attended by Rovnag Abdullayev, President of SOCAR, Giampaolo Cutillo, Italy’s Ambassador to Azerbaijan and Marco Villa, CEO of Technip Italy.

Prior to the signing ceremony, Abdullayev said that as part of the plant’s reconstruction, processing installations will be modernized and the new ones will be constructed.

"This will make it possible to increase the production facilities at Azerikimya, ensure the supply of raw materials to polyethylene and polypropylene production installations and meet the local demand," he said.

The reconstruction of the plant is expected to increase the country’s export potential, enhance the security of the technological process and quality of raw materials and finished products.

Abdullayev further added that the designing and construction works will be carried out in stages until 2019.

The ethylene and polyethylene plant of Azerikimya PU was established in 1994 on the basis of “EP-300” and “Polimer-120” installations. The nitrogen–oxygen complex was commissioned here in 2013. The annual project capacity of the facility is 87,600 tons.

Azerbaijan sees the chemistry and petrochemical industry based on oil and gas processing as one of the main drivers that will lead the country’s economy forward. Enterprises involved in this sector are located in Baku, Sumgayit, Ganja, Salyan and Neftchala. Last year, the value of chemical products produced in Azerbaijan made up 200.1 million manats ($122.65 million).

In October 2015, when Azerbaijan marked the 70th anniversary of the chemical industry, President Ilham Aliyev revealed the government's plan to allocate some $750 million investments to the SOCAR Polymer plant.

Also, SOCAR will completely upgrade the country’s chemical industry, including Azerikimya PU by 2020.

SOCAR, which includes production associations Azerneft, made up of companies involved in the production of onshore and offshore oil and gas, Azerikimya, chemical industry enterprises, and Azeriqaz gas distribution, is involved in exploring oil and gas fields; producing, processing, and transporting oil, gas, and gas condensate; marketing petroleum and petrochemical products in the domestic and international markets; and supplying natural gas to the industries and public in Azerbaijan.

Italian firm joins project to upgrade Sumgayit ethylene-polyethylene plant - AzerNews

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Azersky to bring over $200 million in revenue

Azerbaijan’s low-orbit satellite Azersky will bring more than $200 million in revenue within the next 12 years.

The Cabinet of Ministers noted this in a report to be discussed by the Azerbaijani Parliament on March 15.

Azersky was transferred to Azerbaijan based on an agreement signed between Azerbaijan's satellite operator Azercosmos and the French Airbus Defence and Space.

The satellite allows to survey the 6-million square kilometers of Earth's surface daily. In fact, it means that Azerbaijan’s territory is being monitored every day.

The report also noted that Azercosmos signed a loan agreement worth 132 million euros with the Japanese Sumitomo Mitsui Banking Corporation and Mizuho Bank in 2015 get funds for the purchase of a terrestrial station to control AzerSky.

Meanwhile, the launch of Azerspace-2, the country’s second telecommunication satellite will cost $63 million, which is cheaper by $30 million, the report reads.

Designed to provide digital broadcasting, Internet access, data transmission and creation of VSAT multi-service networks, Azerspace-2 is scheduled to be launched in 2017.

In 2015, Azercosmos and the French Arianespace company signed a contract worth $63 million on launching of the satellite, while launching of Azerspace-1 amounted to $93 million.

The second satellite program will be financed by the Export Development Canada export credit agency, the Cabinet of Ministers reported.

Azercosmos is the first satellite operator in the Caucasus. The company's strategic development plans include the launch of a second telecommunications satellite Earth observation services in the coming years.

Today, Azercosmos provides telecommunication services through the Azerspace-1.

Service area of this satellite includes Europe, Africa, Central Asia and the Middle East. Such countries as Malaysia, Russia, Germany, Ukraine, Egypt, Georgia, UAE, Lebanon, Cameroon, the United Kingdom, Kyrgyzstan, Tajikistan, Estonia and Belarus use Azerspace-1’s services.


Azersky to bring over $200 million in revenue - AzerNews

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Turkey aims for $20B trade volume with Azerbaijan

Turkey aims to boost trade with Azerbaijan by more than 50 percent over the next five years, President Recep Tayyip Erdogan said Tuesday.

Trade between the countries currently stands at around $13 billion a year and Erdogan said he wanted to see it rise to $20 billion by 2021. He recognized that slowing global trade and geopolitical considerations would make it tough to reach the target.

Speaking at a news conference in Ankara with Azarbaijani President Ilham Aliyev, Erdogan highlighted the Trans-Anatolian Natural Gas Pipeline (TANAP) as an example of the two nations cooperation.

The pipeline, which will export Azerbaijani gas to Europe, is “progressing rapidly”, Erdogan said, and is due to be completed on schedule in 2018.

“We even strive to complete before the planned duration of the project,” he added.

The Turkish president also indicated the Baku-Tbilisi-Kars rail project, which will link London with Beijing, as the countries’ highest joint priority. The line is due to be opened in December.

Turkey aims for $20B trade volume with Azerbaijan

Baku FTZ to be true catalyst for regional transport development

President Ilham Aliyev's decree on creation of a free trade zone type special economic area in the Alat settlement of Baku’s Garadagh district represents a milestone of Azerbaijan's policy to strengthen the country's position as a regional logistics and transportation hub.

President Aliyev signed a decree on March 17 on measures to establish a special economic area in the Alat settlement, which will also include the territory of the new Baku International Sea Trade Port.

The decree has been signed for ensuring sustainable economic development, increasing the competitiveness and creating a multi-vector transport infrastructure in Azerbaijan.

Once established, the Free Trade Zone (FTZ) will bring huge revenues to Azerbaijan's state budget. The profitability of FTZ has many examples in the world; FTZ in Hong Kong or in Dubai turned both cities into a center of attraction for investors from all around the world, and paved the way for inflow of huge funds to the countries.

The establishment of FTZ will also bring a large amount of foreign investment in Azerbaijan, as well as open the country's doors to new investors. As Taleh Ziyadov, Director General of the Baku International Sea Trade Port said this free trade zone will attract up to $1 billion just in the first few years.

This will become possible thanks to the special tax and customs policy, which will be pursued in the territory of the FTZ. The privileges can cover the income tax, VAT, tax of profit and property tax.

FTZ residents engaged in business activities will pay taxes at a rate of 2 percent of turnover (funds earned from offered goods and services) in accordance with the country’s legislation. The residents will pay customs payments for excise goods imported to the country in accordance with the Azerbaijani legislation.

Not only residents, but also Azerbaijani consumers will benefit from the establishment of the FTZ as the range of goods produced in the country will be expanded.

Growth of rivalry and absence of duties will lead to a reduction in price of certain products. Rivalry will also force local producers to improve the quality of products.

FTZ needs to have a modern infrastructure, which usually brings more benefits than tax privileges. It also requires large capital investments in the modernization of roads, railways and ports, which is currently being done in Azerbaijan.

The Ro-Ro terminal is of significant importance for the FTZ, and Ziyadov said that the Ro-Ro terminal in the territory of the Baku sea trade port will be inaugurated by late 2016, while the first phase of construction of the port will be completed before the end of 2017.

It is also planned to increase the speed of movement of trains in the territory of Azerbaijan to 80-120 kilometers per hour in two years.

All the above-mentioned measures will contribute to increase of attention of global carriers operating between China, India and Europe to Azerbaijan.

There are too much works ahead to be done, the completion of which will eventually bring more revenues and investments to Azerbaijan and turn the Baku FTZ into the largest logistics and commercial center at the crossroads of east-west and north-south.


Baku FTZ to be true catalyst for regional transport development - AzerNews

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Shipbuilders may be free from VAT, customs duty in Azerbaijan

Five-year exemption from value added tax, customs duties and compulsory fees for the state social insurance has been suggested for the residents of Garadagh industrial park who are engaged in shipbuilding.

Relative amendments to the Tax Code, Laws on Social Insurance and on Customs Tariff were discussed at the meeting of the parliamentary committee for economic policy, entrepreneurship and industry on April 18.

Amendments suggest to exempt any type of imported goods used by the residents (shipbuilders) of the industrial park from VAT and customs duties for five years starting from May 1, 2016.

Regarding contractors, application of zero VAT are offered to the residents on the sale of the goods that are used in shipbuilding while implementing various works and providing services, as well as to the sub-contractors selling products to contractors and carrying out different works or services for them.

Foreign contractors and sub-contractors who are hired by the residents of Garadag industrial park to work in shipbuilding are also expected to be exempt from compulsory fees on the state social insurance for five years beginning from May 1, 2016.

Baku Shipyard LLC received the status of the first resident of Garadagh industrial park last year.

Baku Shipyard LLC was commissioned on September 20, 2013. The participants of the project on the construction of the plant were the state-owned oil and gas company of Azerbaijani of SOCAR (65 percent), Azerbaijan Investment Company (25 percent), and Singaporean KV Enterprises B.V. which is a subsidiary of the Singaporean Keppel Offshore and Marine, KOM (10 percent).

The plant is designed for the construction of a wide range of specialized and merchant ships including multi-purpose offshore vessels such as platform supply vessels, tankers and cargo ships. The company also implemented ship repair works.

Once reached its full capacity, the plant will be able to carry out 100 repair or rebuilding works a year.

In June 2015, Azerbaijan President Ilham Aliyev signed a decree on the establishment of Baku Industrial Park in the territory of Garadagh district.

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http://www.azernews.az/business/95347.html

SOCAR begins consultations with Georgian government on threshold of tender for gas storage construction in this country

The State Oil Company of Azerbaijan (SOCAR) will conduct consultations with the government of Georgia related to the upcoming announcement of the tender for the construction of a gas storage at field of Samgori South Dome.

SOCAR Energy Georgia’s head Mahir Mammadov says that SOCAR has definite interest to participate in the construction of this gas storage facility, the tender for which has not yet been announced.

"We participated in an event on 15 April on the presentation by French company Geostock a draft feasibility study of the construction of this first-in-Georgia gas storage facility. We are waiting for the announcement of a tender for construction, hold relevant consultations with the Georgian government," Mammadov said.

SOCAR’s interest is explainable - the main source of gas for this gas storage is from Azerbaijan.

Its estimated capacity is 210-280 million cu m (15% of total annual gas consumption by Georgia).

In Georgian government’s opinion, the construction of the gas storage in the field of Samgori South Dome will help resolve force majeure issues with providing gas and will ease the imbalance between supply and consumption of gas.

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http://abc.az/eng/news/main/95523.html


Foundation of a rail bridge of Azerbaijani and Iranian parts of Astara to be laid this week


The construction of railway bridge Astara (Azerbaijan) – Astara (Iran) is to kick off this week.

The Iranian media write, the solemn ceremony scheduled for 21 April will be attended by head of CJSC Azerbaijani Railways (ADY) Javid Gurbanov, the co-chairs of the Azerbaijani-Iranian Intergovernmental Commission, Communications & Information Technology Minister Mahmoud Vaezi of Iran and Economy Minister Shahin Mustafayev of Azerbaijan.

The bridge across the Astara River can be commissioned in late 2016 or early 2017.

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http://abc.az/eng/news/main/95527.html
 
Foreign companies seek to operate at Sumgayit Chemical Industrial Park

Azerbaijan's Sumgayit Chemical Industrial Park, established to ensure necessary environment for the development of industrial production, attracts more and more foreign investors.

Deputy Economy Minister Niyazi Safarov has stated that currently companies from Iran, Russia and Germany are interested in becoming residents of the Chemical Industrial Park.

Safarov said that the ministry is considering the issue on these companies' participation in the activity of the Chemical Industrial Park.

"The new residents of the Park will be presented next week," said Safarov.

The area of the Park established in 2011 constitutes 167.66 hectares and resides nearby Sumgait city that is 32.5 km away from Baku. The appropriate external and internal infrastructure (electricity, heating, water supply, communication and other systems) with offices, training centers, offices, laboratory, etc. were be established within the Park to enable profitable activity and development of entrepreneurs and produce competitive products and render services through the application of modern technologies.

Safarov further noted that the negotiations are underway on establishment of a steel production complex here.

The production of admixtures for use in the metallurgy field is one of the major projects to be realized in the Sumgait Chemical Industrial Park, according to Safarov.

"The resident is implementing design works, and the laying of the plant's foundation stone will be held in the near future," he noted adding that these products will be both sold domestically and exported abroad.

The Sumgayit Chemical Industrial Park chooses its residents based on such criteria as the use of innovative technologies, compliance of technologies with environmental standards and the products should be export-oriented and competitive, according to the deputy director.

To increase the investment attractiveness of the park its residents are exempt from paying income, land and property taxes for seven years. Moreover, equipment and technology used in the park are also exempt from value-added tax.

The Azerbaijani government takes serious measures and creates a room for new foreign investors as the national economy is open for all investors that will positively impact the country’s economic potential.

http://www.azernews.az/business/95084.html

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Shipbuilders may be free from VAT, customs duty in Azerbaijan

Five-year exemption from value added tax, customs duties and compulsory fees for the state social insurance has been suggested for the residents of Garadagh industrial park who are engaged in shipbuilding.

Relative amendments to the Tax Code, Laws on Social Insurance and on Customs Tariff were discussed at the meeting of the parliamentary committee for economic policy, entrepreneurship and industry on April 18.

Amendments suggest to exempt any type of imported goods used by the residents (shipbuilders) of the industrial park from VAT and customs duties for five years starting from May 1, 2016.

Regarding contractors, application of zero VAT are offered to the residents on the sale of the goods that are used in shipbuilding while implementing various works and providing services, as well as to the sub-contractors selling products to contractors and carrying out different works or services for them.

Foreign contractors and sub-contractors who are hired by the residents of Garadag industrial park to work in shipbuilding are also expected to be exempt from compulsory fees on the state social insurance for five years beginning from May 1, 2016.

Baku Shipyard LLC received the status of the first resident of Garadagh industrial park last year.

Baku Shipyard LLC was commissioned on September 20, 2013. The participants of the project on the construction of the plant were the state-owned oil and gas company of Azerbaijani of SOCAR (65 percent), Azerbaijan Investment Company (25 percent), and Singaporean KV Enterprises B.V. which is a subsidiary of the Singaporean Keppel Offshore and Marine, KOM (10 percent).

The plant is designed for the construction of a wide range of specialized and merchant ships including multi-purpose offshore vessels such as platform supply vessels, tankers and cargo ships. The company also implemented ship repair works.

Once reached its full capacity, the plant will be able to carry out 100 repair or rebuilding works a year.

In June 2015, Azerbaijan President Ilham Aliyev signed a decree on the establishment of Baku Industrial Park in the territory of Garadagh district.

jisKGkS.jpg


http://www.azernews.az/business/95347.html

SOCAR begins consultations with Georgian government on threshold of tender for gas storage construction in this country

The State Oil Company of Azerbaijan (SOCAR) will conduct consultations with the government of Georgia related to the upcoming announcement of the tender for the construction of a gas storage at field of Samgori South Dome.

SOCAR Energy Georgia’s head Mahir Mammadov says that SOCAR has definite interest to participate in the construction of this gas storage facility, the tender for which has not yet been announced.

"We participated in an event on 15 April on the presentation by French company Geostock a draft feasibility study of the construction of this first-in-Georgia gas storage facility. We are waiting for the announcement of a tender for construction, hold relevant consultations with the Georgian government," Mammadov said.

SOCAR’s interest is explainable - the main source of gas for this gas storage is from Azerbaijan.

Its estimated capacity is 210-280 million cu m (15% of total annual gas consumption by Georgia).

In Georgian government’s opinion, the construction of the gas storage in the field of Samgori South Dome will help resolve force majeure issues with providing gas and will ease the imbalance between supply and consumption of gas.

FeqU0Vc.jpg


http://abc.az/eng/news/main/95523.html


Foundation of a rail bridge of Azerbaijani and Iranian parts of Astara to be laid this week


The construction of railway bridge Astara (Azerbaijan) – Astara (Iran) is to kick off this week.

The Iranian media write, the solemn ceremony scheduled for 21 April will be attended by head of CJSC Azerbaijani Railways (ADY) Javid Gurbanov, the co-chairs of the Azerbaijani-Iranian Intergovernmental Commission, Communications & Information Technology Minister Mahmoud Vaezi of Iran and Economy Minister Shahin Mustafayev of Azerbaijan.

The bridge across the Astara River can be commissioned in late 2016 or early 2017.

P4I2KMW.jpg


http://abc.az/eng/news/main/95527.html




Iran and Azerbaijan to launch production of drugs and cars


Economy Minister Shahin Mustafayev of Azerbaijan and Communications & IT Minister Mahmoud Vaezi held a meeting in Baku today.

During the meeting the ministers signed several agreements for start of joint production.

The first agreement was signed between Azerbaijan Investment Company (AIC), Azersun Holding LLC and Iran’s Darou Pakhsh. The agreement says of joint production of pharmaceutical products conforming to international standards. Sumgait Chemical Industrial Park (SCIP) and Iran’s Darou Pakhsh also signed an agreement to allow launch of drugs production in the Park after the Iranian company gets the SCIP resident status.

Another agreement was signed between Azevrocar (Azerbaijan) and Iran Khadro (Iran), which implies joint production of passenger cars and their spare parts. AIC and Azevrocar LLC also signed an agreement to start manufacture of motor vehicles and spare parts in the territory of Neftchala Industrial Town, after obtaining the NIT participant status.

http://abc.az/eng/news/main/95618.html

Azerbaijan and Latvia discuss cargo transit increase prospects along North-South corridor

Riga (Latvia) hosted a meeting of th Azerbaijani-Latvian Commission on International Road Transport.

The State Motor Transport Service of Azerbaijan informs that in the course of the meeting they discussed the current state of international road transport between countries.

"They also discussed the problems and prospects of development, issues of increasing the volume of transit cargo via international transport corridor North-South, the issues of determining the contingent of permits for 2016-17 and other matters of mutual interest," the Service said.


According to the Service, a final protocol was signed in completion.

http://abc.az/eng/news/main/95623.html



 
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