10-11 July 2006

Following the agreements reached at the Ministerial Conference on Energy Cooperation between the EU, Caspian Littoral States and their Neighbouring Countries, which took place in Baku on 13 November 2004, and recognising the importance of strengthening regional co-operation in energy sector of the countries involved, the 2nd meeting of the four Working Groups (WG) of the ‘Baku Initiative’ successfully took place in Brussels on 10-11 July 2006 with the objective of discussing the draft reports of each working group and to present the preliminary ideas for the upcoming road map reflecting the current state of each of the Baku participating countries in the areas of harmonisation, safety & security, sustainable development, and investment priorities.

Over 65 participants attended the 2nd Working Group Meeting namely,

• Ministers of Energy of involved countries from Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Ukraine, Uzbekistan, Tadjikistan, Turkmenistan, Turkey and Russian Federation as observer
• Advisors / Experts to the Ministers of Energy of involved countries
• Representatives of the European Commission – DG RELEX, DG TREN, EuropeAid
• Representatives of international financial institutions – EBRD, and World Bank

One of the main highlights of this meeting was the presentation by the European Commission on the latest developments on the EU Energy Policy namely the adoption of the June 2006 Conclusions of the EU Council. This document clearly mandates the European Commission to extend the Energy Community Treaty of South-East Europe to Third Countries.

Upon completion of joint sessions of the working group members and parallel sessions of each of the working group, the following conclusions were brought forth:

• WG1: Harmonisation of legal, regulatory, and institutional framework for market liberalisation – the involved countries agreed on the possibility to create a regional electricity market in the South Caucasus and on the need to start moving away from energy barter trade towards trade based on financial terms in Central Asia as well as to focus on establishing methodologies for tariff setting policy / role of regulators for gas and electricity market.
• WG2: Enhancing safety and security of energy transportation networks – the majority of the countries stressed out the need of both rehabilitating the existing energy transit infrastructures and constructing new pipelines and electricity networks.
• WG3: Sustainable Development, Energy Efficiency and Renewable – all countries agreed on the need to call on decision-makers to adopt specific legislation on supporting the update of energy efficiency and renewables according to reflect EU standards and experiences (i.e. Kyoto Protocol).
• WG4: Investment Attraction & Project Facilitation/Project Common Interest – each country presented their strategic priorities within their countries for the development of their energy markets and the corresponding investment priorities on a national level. 

Lastly, it was noted that all partner countries are encouraged to provide the necessary input to all reports and most importantly to develop a road map reflecting the reality of each country as these documents will become reference documents for the European Commission as well as other donors and International Financial Institutions.

For more information on the Working Groups results, please contact the INOGATE Secretariat:
INOGATE Technical Secretariat Kyiv
26/28 Koudriavska Str., Kyiv 04053, Ukraine
Tel: +380.44.2302754, Fax: +380.44.2302753
e-mail: secretariat.kiev@inogate.org