ZlínFebruary 11, 2015

Azerbaijan

Macroeconomic Indicators

2013GDP – 73 bln.GDP Growth – 5.8% (2013), 10 % average in

2003-2013Non-oil Growth – 10 %GDP per capita – 7,495 USDInflation – 2.4 %Investment – 28 bln., FDI – 10 bln.Foreign currency reserves – $50 bln.Unemployment – 5.2 %Poverty – 5.3 %

GDP

Diversification

• 51 % of non-oil GDP• ITC (2nd recipient of FDI, University,

First Sattelite)• Transportation (TRACECA, TASIM,

Baku-Tbilisi-Kars railroad, North-South)

• Agriculture• Tourism

Economic Achievements

• 2006 - UNCTAD quoted Azerbaijan as NO 1 globally as per the FDI Inflow Performance Index

• 2007 – UN Public Service Award• 2008 – World Bank Ranked Azerbaijan Top Reformer in

Doing Business• 2010 – World Economic Forum ranked Azerbaijan as

Leading ICT use and Network Readiness Index among Eurasian countries

• 2011 – World Bank commended Azerbaijan’s poverty reduction strategy (for 10 years from 49 % to 12% (national estimation – 7%))

• 2013 - Global Competitiveness Report ranked Azerbaijan 39th in the world

 

Existing Pipelines

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Caspian Sea

Turkey

Iran

IraqSyria

Russia

Georgia

Baku

Ceyhan

Erzurum

Kazakhstan

Black Sea

Tbilisi

Med.

Sea

Azerbaijan

Turkmenistan

ACG Oil Production & Development

Alov Exploration

Inam Exploration

Shah Deniz Gas Development

Sangachal TerminalSouth Caucasus

Pipeline Gas

WREP Pipeline

BTC Pipeline Oil

NREP Pipeline

Supsa

Novorossiysk

1998 - 2022 Shah Deniz Gross Production

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100150200250300350400

1998 2002 2006 2010 2014 2018 2022

mbo

ed

1998 - 2022 ACG Gross Production

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200

400

600

800

1000

1200

1400

1998 2002 2006 2010 2014 2018 2022

mbd

Stage 1

Stage 2

Azeri

DWG

Chirag

Three pipeline projects:

South Caucasus Pipeline (SCPX) – Azerbaijan, GeorgiaTrans Anatolian Pipeline (TANAP) – TurkeyTrans Adriatic Pipeline (TAP) – Greece, Albania, Italy

TANAP TANAP Project intends for the transportation of the natural gas to be produced in Shah Deniz 2 field and other fields of Azerbaijan (and other possible neighboring countries) through Turkey to Europe.

Memorandum of Understanding was signed between the governments of Turkey and Azerbaijan on December 24, 2011 in Ankara.

Shareholders: Azerbaijan side - 58 %; BOTAS (Turkey) - 30 %; BP (UK) – 12 %.

Project costs: $ 11.3 billion USD.

Total pipeline length is 1,810 km: 1,333 km (Georgia/Turkey border – Eskishehir); 477 km (Eskishehir – Turkey/Greece border, including 19 km offshore).

Connecting directly to:

- SCP on the Turkey-Georgia border- TAP on the Turkish-Greek border

The earthwork activities for construction is planned to start on April 1, 2015.

First gas: Turkey – mid 2018; Europe – end 2019.

Capacity is expandable to 31 bcm/a.

TANAP will contribute to the energy security and development of the European gas transit system!

TAP TAP will transport Caspian natural gas to Europe. Connecting with the TANAP at the Greek-Turkish border, TAP will cross Northern Greece, Albania and the Adriatic Sea before coming ashore in Southern Italy to connect to the Italian natural gas network. The project is currently in its implementation phase and is preparing for construction of the pipeline, which is planned to begin in 2016.

Memorandum of Understanding was signed between the governments of Turkey and Azerbaijan on December 24, 2011 in Ankara.

Shareholders: BP (UK) - 20 %; SOCAR (Azerbaijan) - 20 %, Statoil (Norway) - 20 %, Fluxys (Belgium) - 16 %, Total (France) - 10 %, E.ON (Germany) - 9 %, and Axpo (Switzerland) - 5 %.

Project costs: $ 5.2 billion USD.

Total pipeline length is 867 km (Greece – 547 km, Albania – 211 km, Adriatic Sea – 104 km and Italy – 5 km)

Initial capacity is 10 bcm/a, expandable to 20 bcm/a.

Start operation: 2019.

Connection to Bulgaria and Ionian Adriatic Pipeline.

TAP will contribute to Market Integration and Diversification of Gas Supply to Southern Eastern Europe.

10 reasons to invest in Azerbaijan

1. Political and economic stability- Foreign debt is only 7.5% of the GDP - 39th Most competitive economy - 8th Most stable macroeconomy

2. FDI friendly laws- Strong investor protection policy and legislation. - Guarantees for foreign investors against adverse changes in the legislation, nationalization, requisition, discrimination policy. - Compensation of damages and repatriation of profits ensured legislatively

10 reasons to invest in Azerbaijan

3. Favourable tax regime- Azerbaijan has third easiest taxpaying procedures among CIS countries- Tax holidays (except land tax) in agriculture- Tax incentives in industrial and hi-tech parks

4. Skilled labour force- Around 30 thousand students graduate annually- State Programme on Education of Azerbaijani Youth Abroad in 2007-2015. The number of graduates will reach 5000 by 2015 - A large R&D center, 28 research institutes, 52 universities and 108 colleges

10 reasons to invest in Azerbaijan

5. Abundant resources- Besides oil and gas, Ferrous and nonferrous, rare and fine metals, construction materials- 9 climate zones

6. Favourable location- Logistic hub and easy access to market in CIS, Central Asia and Middle East

7. Developing infrastructure- 5 international airports, largest port on Caspian Sea, international transportation routes

10 reasons to invest in Azerbaijan

8. State support- NO restrictions to foreign investments

9. Reformist environment- Top reformer among post-Soviet countries

10. Liberal trade regime- Trade relations with over 155 countries

- NO EXPORT DUTIES and restrictions except

for some strategic commodities

Azerbaijan-Czech • $1.6 billion trade turnover • Major exports: crude oil and oil products.• Major imports: ferrous metal made rails,

electrical appliances; home equipments.

Potential fields for cooperation

• Heavy industry, chemical industry, • Tourism, eco-tourism,• Construction,• Agrarian industry.

Booming Economy

New Opportunities

Q/A

• ContactEmbassy of AzerbaijanNa Zátorce 783/17Praha 6, 160 00Tel: (+420) 246-032-422Fax: (+420) 246-032-423E-Mail: prague@mission.mfa.gov.azhttp://www.azembassy.cz