The European Commission Budget Support Project

The Budget Support project involves political dialogue based on partnership and mutual accountability, financial transfers to the treasury of the partner country, an assessment of progress achieved and capacity development support. The goal of the project is to eradicate poverty, ensure sustainable economic development and promote and strengthen democracy.

The EU Budget Support project contract, signed between the European Union and its partner countries, provides for the application of the following main principles and elements within the policy framework in order to strengthen the partnership:

            1) A stronger connection with the fundamental principles of human rights, democracy and the rule of law;

            2) Further differentiation of budget support agreements, allowing the EU to better respond to the political, economic and social situation of partner countries;

            3) Stronger focus on accountability and transparency;

            4) Strengthening the risk management framework for the EU Budget Support project, as well as the decision-making process and structures;

            5) Focus on results, performance, foresight and ownership; 

            6) Strengthening EU coordination.

The specific objectives of the Budget Support programmes are defined in line with two important principles: 

            1) Alignment with partner countries’ own development policies, priorities and objectives;

            2) Consistency with the EU development policy, particularly ‘Agenda for Change’.

In order to develop the energy sector in Azerbaijan, there is a need to align this sector with the principles of a market economy, to carry out relevant reforms and to rebuild the infrastructure, which has necessitated benefiting from the EU Budget Support mechanism. Through this mechanism, it is planned to implement the Energy Reform Support Programme (ERSP) to increase the use of alternative and renewable energy resources and energy efficiency. On December 29, 2008, the Government of the Republic of Azerbaijan and the European Commission signed the ‘Financing Agreement for the Energy Reform Support Program’, which was approved in 2009 by the relevant Order of the Cabinet of Ministers. In 2009, the European Commission approved an Action Plan for the use of a grant of 13.0 million euros allocated to Azerbaijan under the Energy Reform Support Programme. In the Action Plan, the Ministry of Energy acted as a beneficiary in four out of six areas. These areas were:

               - The preparation of tender documents for technical assistance and supply projects within ERSP;

               - A support project for the implementation of ERSP;

               - A support project for the use of ARES (alternative and renewable energy sources) and the expansion of energy reform;

               - The implementation of pilot investment projects on ARES and energy reform.

Other areas and beneficiaries included:

              - Improving official statistics in the field of energy and the State Statistics Committee;

              - Public Financial Management Improvement Support Project and the Ministry of Finance.

The necessary measures have been taken by the Ministry of Energy to implement ERSP. The regular reports on the implementation of the programme have been issued.

In 2013, in accordance with the Decree of the President of the Republic of Azerbaijan No. 810, dated February 1, 2013, on ‘Additional Measures in the Field of Alternative and Renewable Energy’, amendments were made to Resolution No. 191 of the Cabinet of Ministers of the Republic of Azerbaijan. The State Agency on Alternative and Renewable Energy Sources (SAARES) was thus approved as the beneficiary of ERSP. This way, the implementation of the programme was continued by the agency. Although the implementation period of the programme was initially planned for 2010-2012, the period was later extended to 2016.

On June 1, 2018, Baku hosted a ‘round table’, organised by the Ministry of Energy and AZPROMO, with the participation of a delegation led by European Commissioner for Budget and Human Resources, Günther Oettinger, and German businessmen. Parviz Shahbazov, the Minister of Energy, attended the event.

On November 22, 2018, discussions on ‘Energy Audit and Energy Management Systems’  were held at the Ministry of Energy with the participation of an EU Expert Mission and a number of government agencies within the European Commission's Technical Assistance and Information Exchange (TAIEX) instrument.

On January 14, 2019, a workshop on energy market concepts, design and operation was held with the participation of the Ministry of Energy and international experts, again within the European Union's Technical Assistance and Information Exchange (TAIEX) instrument.