EU Cooperation - The Times Of Central Asia

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Central Asia’s Role in Europe’s Energy Future: Insights from Samuel Doveri Vesterbye

The Times of Central Asia sat down with Samuel Doveri Vesterbye, Director of European Neighbourhood Council, a research organization funded by the EU and by Member States, to discuss prospects for the further development of the EU's relations with Central Asia. TCA: How significant is Central Asia for Europe's energy diversification strategy, especially in light of the need to reduce dependency on Russian gas? Europe needs energy. Since the revolution in shale gas production and liquefied natural gas (LNG) transport, it’s clear that European energy has become more diversified, particularly since Russia’s war against Ukraine. Reliance on Russia has decreased, while importation of U.S., African and Asian LNG has increased. Pipeline gas from Azerbaijan and renewable energy are both important and rising sources of diversification. The problem is that Europe doesn’t only need energy; it needs inexpensive energy, preferably in terms of pipeline gas. This is why the Caspian region, home to some of the world’s largest natural gas reserves, is important. That’s one significant reason for Europe’s renewed interest in the region. TCA: What are the key energy projects connecting Central Asia to Europe, and what obstacles do they face in becoming viable alternatives? In 2022–2023, the EU and the European Bank for Reconstruction and Development (EBRD) financed and conducted the biggest connectivity study about Central Asia to date. This study outlined the full capacity, potential, and challenges of trans-Caspian infrastructure and regulatory connectivity. It has become a key roadmap for all governments involved, as well as for the private sector and international investors in renewables, gas, transport, and other types of logistical infrastructure. In January and February 2024, the EU, together with international financial institutions, provided over €10 billion in low-interest loans and grants for the construction of energy and transport infrastructure cross-regionally. This amount represents over 50% of the investment needs estimated and outlined in the EBRD study. It is a strong indication of Europe’s political and financial dedication towards the region. TCA: How can Central Asian economies benefit from closer economic ties with Europe, particularly through energy trade? Central Asia has significantly increased its economic engagement with the European Union. In less than a decade, the EU has become Kazakhstan’s biggest trade partner in the world, ahead of China, Russia and the United States. Uzbekistan is taking a similar direction to Kazakhstan, and is about to sign an Enhanced Partnership and Cooperation Agreement (EPCA) with Brussels covering energy, politics, security, trade, and natural resources among many other issue-areas. For Central Asia, its new relationship with the EU is strategically intelligent, as the region ceases to be only a part of so-called “Chinese transit trade”. TCA: What economic reforms are necessary in Central Asia to align with European standards and attract more investment in energy sectors? The relationship with the EU allows Central Asia to increase its trade and gain new technology as it also benefits from industrialization. Both Europe and Central Asia are full of small and medium-sized nations who are often under pressure from great...

Economic Cooperation EU Cooperation Government Banking Finance

Italian Bank to Enter Kazakhstan Market

An Italian state bank, Cassa Depositi e Prestiti, plans to establish a new credit line in Kazakhstan, as announced by Edmondo Cirielli, Italy’s Deputy Minister of Foreign Affairs and International Cooperation. Cirielli made the announcement during his meeting with Arman Shakkaliyev, Kazakhstan’s Minister of Trade and Integration, on October 29 in Astana. Cirielli stated: "We are confident that our relations will only strengthen in the trade and economic sphere. Kazakhstan occupies a key position in Central Asia and connects Europe with the region. We plan to open a credit line of our state bank, Cassa Depositi e Prestiti, in Kazakhstan.” Minister Shakkaliyev noted that Italy is Kazakhstan's third-largest trading partner among European Union countries. In 2023, trade turnover between the two countries amounted to $16.1 billion, 7.8% more than the previous year. Exports from Kazakhstan to Italy reached $14.8 billion, and imports stood at $1.2 billion. In January-August 2024, bilateral trade increased by 33%, reaching $13.8 billion, with Kazakh exports rising by 36% to $12.9 billion. Astana hosted the 9th Kazakh-Italian working group meeting on economic and industrial cooperation on October 29. Deputy Minister of Foreign Affairs Edmondo Cirielli headed the Italian delegation. The meeting focused on increasing the transportation volume along the Trans-Caspian International Transport Route, which will create additional opportunities for bilateral trade. The parties also confirmed their interest in developing the transport and logistics sector. Kazakhstan proposed expanding cooperation in the agricultural sector, including fruit and vegetable growing and grain processing and expressed its readiness for long-term partnerships with Italian grain processors and the supply of high-protein wheat to the Italian market. Italian companies were encouraged to invest in Kazakhstan's renewable energy sector and the Khorgos Special Economic Zone, strategically located on the Kazakh-Chinese border.

EU Cooperation

Amid Russia-Ukraine War, Top EU Diplomat Promises Closer Cooperation with Central Asian States

Josep Borrell, Vice-President of the European Commission and High Representative of the European Union for Foreign Affairs and Security Policy, visited Central Asia to meet with the presidents of Kazakhstan and Kyrgyzstan. This trip by Borrell, whose term ends in October 2024, underscores the region's growing global importance in terms of trade and energy security, especially given the ongoing war between Russia and Ukraine. Borrell arrived in Kazakhstan for an official visit on August 1, marking his second diplomatic trip since his appointment as the EU’s foreign affairs chief. Explaining the purpose of the visit, he said “as my mandate as a representative of the European Union ends in three months, it was very important for me to come here to Astana to reaffirm the strong interest and commitment of the European Union to strengthen cooperation with Central Asia in general and with Kazakhstan in particular as the strongest country in the region.” Europe’s realization of Central Asia’s strategic value has recently become more apparent. In a presentation to investors on January 29, 2024, Borrell detailed the EU's growing interest in Central Asia, citing Russia's conflict with Ukraine as a driving force behind this policy reorientation. Borell asserted that the EU regarded Russia as a security concern and is committed to lessening its dependence on Russia. He impressed the same point on Central Asian audiences and called for strengthening trade relationships as well as diminishing reliance on Russia through the Global Gateway, a strategy by the European Union to invest in infrastructure projects worldwide. Notably, the primary land routes from Central Asia to the EU currently traverse Russian territory. The EU’s preferred corridor, known as the Trans-Caspian International Transport Route, is in high demand with volume of cargo transportation in 2023 of more than 2.7 million tons, 86% higher than in 2022. This capacity is projected to rapidly expand as infrastructure investments become operational. “I used to say that four years ago, when I came to Brussels, Central Asia was a little bit in the middle of nowhere – and now, you are in the middle of everything… Everything that matters between Europe and Asia goes through you”, said Borrell. Borrell's first trip to Kazakhstan as the EU’s top diplomat was in November 2022. Since that time, the country has become increasingly significant for Europe as a transport corridor, an alternative energy partner (oil, green hydrogen, and nuclear), and a supplier of scarce critical materials used for the development of technology products. In this regard, Kazakhstan is not only crucial for Europe and its Western allies but also for Russia and especially China, both of which are competing for trade and investments in the country and in the broader region. For Uzbekistan, Russia is boosting its gas exports and is planning to construct nuclear power plants. China has invested billions of dollars in transport infrastructure investments in Central Asia under its Belt and Road Initiative, which has significantly enhanced regional connectivity. Rather than aligning exclusively with one power bloc, Kazakhstan’s...

International Cooperation Reforms EU Cooperation

Roundtable on Uzbekistan’s Reform Agenda

The 2nd Roundtable of Uzbekistan’s Country Platform was held last week in Tashkent. Backed by the European Union, the event provided a platform for discussions amongst over 80 government partners and international institutions on Uzbekistan’s reform agenda and coordinate support activities. As reported by the Delegation of the European Union to Uzbekistan, the participants agreed to continue collaboration through more than 13 sectoral working groups supporting issues prioritized by the Uzbekistan–2030 Strategy including agriculture, energy security, green growth, and the rule of law. Led by the Agency for Strategic Reforms (ASR) under the President of Uzbekistan and the Ministry of Economy and Finance of Uzbekistan, and with secretarial assistance from the European Union, the Country Platform aims to foster effective coordination. Bakhodir Rakhmatov, Director of the Agency for Strategic Reforms, commented: “Constructive collaboration between development partners and government ensures achievement of the priority reform objectives identified by President Mirziyoyev aimed at creating a more prosperous and sustainable future for all. The ASR plays a pivotal role in coordinating the engagement of ministries and agencies with development partners.” Taking over the support previously provided by the World Bank in May, the European Union committed to assisting the Country Platform until the end of 2025. “The European Union is honored to co-chair and promote the Country Platform as a forum for open dialogue, cooperation and collaboration between Uzbekistan and development partners,” said Charlotte Adriaen, Ambassador of the European Union to Uzbekistan. “The common goal is to support Uzbekistan in its reform path. The Platform is an opportunity to join forces, to effectively move together bringing prosperity, sustainable development, leaving no one behind.”

International trade EU Cooperation Trans-Caspian Corridor

EU-Funded Projects Strengthen Central Asia’s Trade and Economic Ties

On 26 June, Almaty hosted the closing meeting of two regional projects in Central Asia funded by the European Union: the ITC Ready4Trade Central Asia and the OECD Policy Component of the EU Central Asia Invest Programme. As reported by the Delegation of the European Union to Kazakhstan, both initiatives have done much to support Central Asian countries' efforts to advance trade reforms, enhance competitiveness, foster connectivity and strengthen regional cooperation. The event brought together policymakers and key stakeholders from private and public sectors in Central Asia, as well as representatives of the European Union, the International Trade Centre (ITC), and the Organisation for Economic Co-operation and Development (OECD). "The European Union has long been supporting the governments of Central Asian countries in their business environment and trade and transport connectivity reform efforts together with international partners, including ITC and the OECD,” said Kestutis Jankauskas, Ambassador of the European Union to Kazakhstan. “Going forward, we will endeavour to develop the potential of the Trans-Caspian Transport Corridor together with our Central Asian partners to make it a competitive, multimodal and sustainable corridor that can bring Central Asia and Europe closer together. We look forward to the new EU-funded Prosperity Programme to be implemented by ITC and the OECD to support the implementation of this goal.” The ITC Ready4Trade Central Asia project has made significant progress in enhancing intra-regional and international trade across five Central Asian countries. In close collaboration with the governments, the project tackled obstacles to cross-border trade by simplifying and digitalising trade procedures, ensuring greater transparency and efficiency terms of cost and time. The project also established national SME Trade Academies, providing tailored on-the-job coaching and enhancing the capacity of SMEs to participate in the global market. The OECD has supported reforms in areas including private sector development, internationalization, digitalisation, trade and transport connectivity, and resilience to shocks. Zhanel Kushukova, Vice-Minister of Trade and Integration of Kazakhstan, commented: “In recent years, significant work has been done in Central Asian countries to simplify and optimize trade procedures, reduce the time for trade operations and automate customs processes. This has allowed us to almost double the volume of trade turnover over the past five years, to $10 billion. In the medium term, Kazakhstan plans to increase trade turnover with Central Asian countries to $15 billion.” Kazakhstan’s QazTrade agency estimates that the implementation of the recommendations proposed by the above projects and the transition to paperless trade will lead to a 30 percent increase in trade turnover in the medium term.

European Union EU Cooperation Economy Export/Import Investments

Kyrgyzstan and EU Strengthen Economic Cooperation

During his working visit to Brussels, Kyrgyz President Sadyr Japarov held talks with Valdis Dombrovskis, the Executive Vice President of the European Commission. The main topics of discussion were deepening trade and economic cooperation, attracting investment, realizing joint projects in mining and the green economy, introducing digital technologies, and developing human resources. Dombrovskis emphasized the importance of strengthening partnerships between Kyrgyzstan and the European Union. He noted that signing the Enhanced Partnership and Cooperation Agreement opens new opportunities for realizing mutually beneficial trade and economic projects. He also expressed the EU's readiness to deepen economic cooperation and interest in participating in significant energy and infrastructure projects, such as the Kambarata HPP-1 and the China-Kyrgyzstan-Uzbekistan railroad, emphasizing their financial potential. Sadyr Japarov thanked the EU for its support and for signing the new Agreement on Enhanced Partnership and Cooperation, expressing his confidence that it would strengthen the agreements reached and create a modern legal basis for future bilateral interaction. The President noted that Kyrgyzstan provides significant opportunities for trade and investment due to its geographical location and transit potential. Japarov also emphasized the country's commitment to the green agenda, stating its intention to reduce greenhouse gas emissions by 44% by 2030 and achieve carbon neutrality by 2050. As part of the initiative to develop a green economy, Japarov proposed exchanging foreign debt for green projects, thus improving the global environmental situation. Projects on water management and the introduction of environmentally friendly technologies in Kyrgyzstan's mining industry were also discussed.