Czech Ambassador: 'We are hoping for new investment opportunities for our companies in Azerbaijan'

The Czech Republic is interested in greater participation in investment projects in Azerbaijan. The companies of this European country have good experience in energy and communications, and could use it in our country as well.

Report presents an interview with Czech Ambassador to Azerbaijan Milan Sedlacek, who spoke about the priorities of cooperation between the two countries, investments in Azerbaijani projects, the new system of marking tourist routes proposed by the Czech government, and the role Azerbaijan plays in ensuring the energy security of the European Union.

- How do you evaluate the political cooperation between Czech Republic and Azerbaijan? How is the partnership between the countries going on? What areas of cooperation are the most important?

- Our countries have excellent bilateral political relations, and we want Azerbaijan to have excellent relation with the EU, over which the Czech Republic is currently presiding, as a whole. Further development of trade between our countries is a priority for us, with a focus on making the trade balance which has so far been strongly in favour of Azerbaijan more even. We are interested in the implementation of the 2021 Agreement on cooperation in the sphere of energy between the responsible Czech and Azerbaijani ministries, especially in light of the necessity to get rid of our dependence on Russian gas and oil and of Azerbaijan's renewable energy potential but also of your country's interest in energy-efficient solutions which Czech companies can offer. Last not least, we need to focus on people-to-people contacts, especially in the academic sphere. Dedicated language and culture centres at Czech and Azerbaijani universities would make each of our countries better known and understood in the other. This is in the interest of the Czech Republic.

- During your speech at an event dedicated to Czech Republic National Day, you mentioned that the Czech Republic is interested in cooperation with Azerbaijan in the field of green energy, logistics and smart cities. Are there any joint projects in this sphere?

- Czech companies are among the world leaders in innovation technologies with worldwide experience and are interested in broadening their activities on new markets. The Azerbaijani market is, naturally, also of interest for them. Our Embassy has been supporting initiatives of our exporters on the Azerbaijani market and promoting bilateral trade relations for years as one of the pillars of our relations. Furthermore, following the publication of Azerbaijan 2030: National Priorities for Socio-economic Development, several bilateral projects focused on water management, green energy and energy efficiency are under consideration for the near future.

- Are there any plans to attract Czech companies in territories liberated from occupation?

- We would be very much interested in the involvement of Czech companies in the post-conflict reconstruction. For most of the interested Czech companies, the lack of available information about the opportunities and projects in this area remains a challenge. We have therefore been talking about promotion activities with relevant Azerbaijani partners. Several projects are in the initial stage of discussion; we believe the upcoming 5th Session of the Joint Commission on Economic, Scientific-Technical and Cultural Cooperation in Prague early next year will provide a further impetus.

Our companies are currently looking for concrete options. The Czech Republic welcomes the publication of the 4-year Action Plan for the establishment of a Green Energy Zone. Timely and complete information regarding the upcoming tenders would be appreciated by the companies interested in the process.

- What role does Azerbaijan play in ensuring Europe's energy security?

- We already know Azerbaijan is a reliable and important partner in the field of oil supplies to Europe. The recent agreement on the expansion of the Transalpine Pipeline (TAL), which brings Azerbaijani oil to EU Member States including the Czech Republic make us less dependent on Russia. The signature of the Memorandum of Understanding on Partnership in the Field of Energy demonstrates the growing importance of cooperation between the EU and Azerbaijan. The Memorandum underlined the strategic role of the Southern Gas Corridor in EU diversification efforts and reflects the will to accelerate the expansion of Azerbaijani renewable energy capacities which may help both Azerbaijan and the EU in the process of transition to clean energy, in line with our climate commitments. Relevant governmental bodies in Prague and Baku consider bilateral cooperation in these areas important, and Czech-Azerbaijani Agreement on Cooperation in the Field of Energy was signed during the visit of our Minister of Foreign Affairs in Baku in September 2021. The implementation of the Agreement may enhance our cooperation in the field of energy supplies as well as the involvement of Czech companies in projects focusing on energy efficiency and renewables.

- What can you say about cooperation in the trade sphere between the Czech Republic and Azerbaijan?

- Commercial and economic cooperation is among the top priorities of our bilateral relations. The statistics of trade cooperation between our countries, which was significantly affected by the COVID-19 pandemic, show a gradual recovery of the trade turnover. Business projects and personal meetings of entrepreneurs and officials are considered to be the most effective tools for the further development of our bilateral economic relations. A delegation of agriculture experts led by the Deputy Minister of Agriculture Sarvan Jafarov visited the Czech Republic earlier this year to explore opportunities for cooperation in the field of animal husbandry and genetic engineering. Moreover, as an initiative of the Czech EU Council Presidency, an Eastern Partnership Business Forum on Geoeconomic Challenges and Opportunities was organized by our Ministry of Industry and Trade in Prague on 17-18 October. Led by the 1st Deputy Minister of Economy, Mr. Elnur Aliyev, the Azerbaijani delegation consisted of investment, renewable energy and water management experts. The statistics indicating an impressive year-by-year increase of mutual trade in the first nine months of 2022 should be seen as start of a process of return to pre-pandemic cooperation. According to the data of the Czech Statistical Office, the trade turnover in the period from January until September 2022 has increased by 133 %, which is promising.

- Are Czech companies interested in investments in Azerbaijan?

- In the previous decade, the most important Czech investment projects in Azerbaijan were in the field of transport infrastructure. Our flagship project, the reconstruction of the Azerbaijani part of the Baku-Tbilisi-Kars Railway Corridor, was completed by a group of our companies led by Moravia Steel in 2019. As we are approaching a new and very different era, we are hoping for new investment opportunities for our companies in Azerbaijan in the sphere of connectivity and energy, in the widest sense of those words. A pilot project completed by Czech companies in the Garavalli village school in the Shamakhi region in 2018 was aimed at raising awareness about the efficient use of energy resources; the Czech Exim bank proposed a loan to Azerbaijani government to fund the continuation of the project should the Government see it as useful. Generally, the Czech Export Guarantee and Insurance Corporation and Exim bank are ready to support well-prepared business projects. Needless to say, anyone who wants to invest money abroad will first want to look at the legal climate of the country in question. In this regard, the conditions guaranteed by the Azerbaijani government for potential investors in the Alat Free Economic Zone are of interest, and our Embassy is also in touch with the Agency for the Development of Economic Zones.

- How many Czech companies are present in Azerbaijan and in what spheres?

- The number of companies operating on Azerbaijani territory was significantly affected by the COVID-19 pandemic. A gradual return of Czech companies to Azerbaijan could only be observed in 2022. As a latest example of a Czech company successfully entering Azerbaijani market, we can name the Sencor brand. Another positive development we have been observing in Azerbaijan most recently is that more and more Czech “Tatra” vehicles are used in road infrastructure projects.

- How is cooperation in the tourism sphere between two Czech and Azerbaijan going on? How does pandemics impact tourist flows between countries? What can you say about the situation after the pandemic, has the number of tourists increased or decreased?

- Their numbers have decreased, not least because air tickets are more expensive than before the pandemic. The extension of direct Baku-Prague AZAL flights until next year is a positive signal. We would of course welcome a year-round direct air connection, also because more Czech tourists visiting Azerbaijan would benefit our relations. It is worth mentioning that more Czech tourists visit Georgia which has a cheaper air connection with my country than Azerbaijan; many Czechs used to travel to Baku by a night train from Tbilisi in the pre-pandemic days. We see a potential in the area of environmentally sustainable tourism in Azerbaijan, and are ready to help your country with its development, including by promoting the „Czech“ tourist trail marking system in your country.