Caspian Energy Journal Caspian European Club
Friday, 09 September 2016 12:30

Sweden and the EU are still interested in the Trans Caspian Project, - Ambassador Ingrid Tersman Featured

Caspian Energy: Ms. Tersman, you have recently come to Azerbaijan. Could you please tell about the plans of your mission here?

Ingrid Tersman, Ambassador Extraordinary and Plenipotentiary of Sweden to Azerbaijan, Tadzjikistan, Turkmenistan and Uzbekistan: I am pleased and honored with the assignment. Previously, I served as Ambassador to Moldova, and lived in Kishinev for five years. I have been working in this broader region for almost 25 years. My plans for this mission, with me as a Stockholm-based-ambassador and our Embassy in Baku, are to continue to strengthen and develop the bilateral ties between Sweden and Azerbaijan. That includes political dialogue, promotion of Swedish exports and business to Azerbaijan, and of course cultural cooperation.


CE: What is the common thing between Azerbaijan and Moldova in the opinion of the EU and Sweden?

Ingrid Tersman: I think, one should not compare countries. That is very difficult because each country is unique. From my perspective, Azerbaijan and Moldova have partly a common history, being a part of the Soviet Union, which was now a long time ago. You are both the parties to the Eastern Partnership, and I believe you are both seeking in different ways a constructive relationship with the European Union. But Azerbaijan is a country with tremendous energy resources, but Moldova is not. Moldova is an agricultural country, what it has been for many years. Some of the challenges in modernization and economic diversification are similar for both countries.


CE: What do you think about the future of the Eastern Partnership, as well as about the strategic partnership agreement between Azerbaijan and Sweden, which is currently under development?

Ingrid Tersman: Sweden is a country which formed and started the Eastern Partnership together with Poland in 2009. We believe it is a good policy for and with the EU’s closest Eastern neighbors, an offer of political association and economic integration. The requirements of domestic reforms, for the countries that have chosen to pursue a Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU, to be able to enjoy the full access to the EU’s internal market, are met with considerable financial assistance. I see many benefits for the Eastern Partnership countries with a close relationship with the EU, political, democratic as well as economic. It is also good for the EU to have stable, democratic, and economically prosperous neighbors.


When it comes to the new legal framework for a closer cooperation between Azerbaijan and the EU, Sweden clearly supports that process. We are looking forward to the beginning of the negotiations of this strengthened relationship between the EU and Azerbaijan. We hope from the Swedish side that an agreement will be reached, that it will be substantive and broad, and cover a number of areas, both strengthening our economic cooperation and put a clear focus on the values that we together share. So when our Foreign Minister Mrs Margot Wallström was here in March, she was very clear that Sweden is a strong supporter of  a substantive agreement between the European Union and Azerbaijan. We support a broad agreement that focuses on many areas where we have connecting points, both when it comes to political and democratic values and when it comes to the economic side and the reform side. But it will be up to negotiators from the European Commission and Azerbaijan to take that forward.


CE: Ms. Tersman, the beginning of your mission early this year coincided with the conduction of economic reforms in Azerbaijan. Do you think they will expand opportunities of economic cooperation of the two countries?

Ingrid Tersman: Azerbaijan is a country that has a tremendous richness, when it comes to energy resources or oil exports, but of course the drop in oil prices has been a true challenge to the country and its economy, as well as to all oil producing countries.  But maybe one can say that it is not only a challenge, but it is also an opportunity and I trust  that was one of the main reasons behind of the start of the economic reforms in Azerbaijan. I hope that the reforms that have begun will continue. You have started to simplify rules for companies, to lower the number of inspections. There have been simplifications and positive changes in the customs agency. Reforms have been started in the financial sector, and I hope they will be continued. This is necessary not only for economic growth in the country, but it is also a way to make Azerbaijan a country attractive to investors, as investors from Sweden or other countries are looking for predictability, transparency and equal treatment on any market. And if this is what the reforms will assist with, then investors will be interested and it will help to diversify the Azerbaijani economy, which I know, that your Government is focusing on. Once it happens, it will boost the interest of Swedish companies. They are already interested, but their interest will grow even more.


CE: What is the current trade turnover between the countries?

Ingrid Tersman: I have to say that it is very low. In 2014 the Swedish export to Azerbaijan comprised 1.8 million euros, and the Swedish imports from Azerbaijan made 1 million euro. It is a very low indicator, but I believe that there is a scope for an increase.


CE: In which areas do you see the opportunities for growth?

Ingrid Tersman: We have been looking at this matter. We have an organisation called “Business Sweden”, which helps Swedish companies to export and to establish their business in other countries, as well as to promote Sweden both when it comes both to import and export. And together with them we have looked possible areas and I would mention the telecom area, ICT and also healthcare. This year in May a delegation of 12 Swedish companies in the ICT area visited Baku. They saw opportunities in the wider ICT sector. I think that was a successful visit and hope we can build upon that. We will continue our dialogue with Swedish companies and with Azerbaijani counterparts on areas of possible cooperation.


CE: What additional measures should be taken to intensify the trade turnover?

Ingrid Tersman: It is very much up to companies themselves. Companies are independent bodies and they seek business opportunities globally. Swedish companies are globally oriented, because we are a small country and many our companies are on the global market. So when they see opportunities, they come. That’s why we had this investment delegation in May and that’s a good combination with the reforms, which Azerbaijan has started. And I think if to look at economic reforms in any country, there is no country with a perfect investment climate. But I think what is important for companies that are looking for new opportunities is that they see an improvement coming and that they see that market becomes more open, more easy to work on. And that was one of the reasons why they came here.


CE: What policy does Sweden follow in energy security issues? What is the forecast for a growth of consumption of energy resources for coming years?

Ingrid Tersman: Our energy balance features a combination of energy resources, and we rely mostly on hydropower and nuclear power, almost 40% of our energy use comes from hydropower and nuclear. The oil and gas sector is only about 34%, and wind and biofuels account for the rest 23%. So, in total renewable energy is really important to our country and now we are almost up to 60% in renewable. Our Government is very ambitious when it comes to energy policies and climate issues because they are really tightly combined. So our Government wants us to reduce emissions as much as we can, and by 2020 Sweden will have a 40% reduction of emissions and at least 50% of renewable energy. And we are working to increase energy efficiency by 20%. And already this June there was an agreement between the Swedish Government and the opposition parties about a 100% transition to renewable electricity by the year 2040. So, in 20 years we are looking forward to working wholly with renewable energy for electricity. Being acutely aware of the need to work against climate change and reduce carbon emissions globally, Sweden is working actively nationally, within the EU and the UN to that objective.


CE: What could you say about attraction of technologies of alternative energy to the Caspian region?

Ingrid Tersman: If there is an interest from the Azerbaijani side, we would be happy to talk to Swedish companies and see if they are interested to come. I trust that every country, to the extent possible, needs to work in that direction. We would be very happy to discuss this with Azerbaijan - our expertise and possibilities of working together, because reducing emissions is not just a challenge of national character, but also a global issue for all of us. I know that over the years the Swedish companies and Swedish expertise have already done some work in Ukraine. There are also opportunities to work with the EBRD, the European Bank for Reconstruction and Development on this, through their E5P-program, a €168-million program for Eastern Partnership countries with substantial Swedish funding. That program focuses on improving energy efficiency, reducing CO2-emissions, and also improving economic competitiveness. I believe that for the economy of Azerbaijan, which is the most energy-intensive of the region, energy efficiency measures in buildings, waste management and district heating rehabilitation are key sectors to reduce energy consumption and improve the environment.


CE: The Government of Sweden currently does not have a single opinion on the use of nuclear energy. Which direction will still be the main “for” or “against”?

Ingrid Tersman: Sweden has relied for a long time on nuclear energy in its energy use, and nuclear energy is a contentious issue in many countries, so also in Sweden. In 1980, Sweden held a referendum on the country’s future use on nuclear power. A slow but successive reduction in the use of nuclear energy was the option that won the most votes – a typical Swedish compromise solution. 2015, 34% of Swedish electricity production comes from nuclear energy, the previous years, the figure was higher. We used to have 12 reactors in operation, of which only 9 are currently in service. In June this year, the Swedish Government and the political opposition parties reached an agreement that existing older reactors can be replaced by newer ones. This is in a sense a historic agreement, between the two parties in Government and five opposition parties, and it also included agreement on renewables and energy efficiency. But the basis for continued nuclear energy in Sweden rests on decisions by the companies that own the production of nuclear energy. I trust, however, in Sweden like in many other countries, use of nuclear power will continue to be an issue of debate.


CE: How does Sweden assess the large-scale project of construction of the Southern Gas Corridor implemented by Azerbaijan?

Ingrid Tersman: I believe that the implementation of the Southern Gas Corridor is important for the export diversification or export routes for Azerbaijan and it is also important for the European Union. It is a possibility for us to diversify our imports of oil and gas. Unlike those countries that heavily use these resources, we have a very low level of oil and gas consumption nowadays, and it will be reduced over time. But for the EU as a whole, which is dependent on gas and oil, it is important, and it is important for us as a part of the EU. And that is also why EBRD and also other international financial institutions are considering supporting the construction of the project. I think that it is important for all of us and also for the Strategic Partnership in energy between the EU and Azerbaijan.


CE: How feasible is involvement of Swedish companies in this project?

Ingrid Tersman: There might be opportunities for Swedish companies, which are involved especially in supporting the construction, delivery of energy, engineering, services and security, to join the project. Swedish companies, often global in scope can provide excellent expertise and solutions to very complex problems.


CE: What do you think of Nord Stream 2? Will Sweden support this project?

Ingrid Tersman: The Swedish Government is studying Nord Stream 2 as we speak and has invited political parties to discuss the pipeline and possible implications for Sweden. There is a debate in Sweden now on Nord Stream 2, both concerning environmental issues and security policy issues or implications. I trust the Government’s view on Nord Stream 2 will be made public in the near future.


CE: What do you think about prospects of the Great Silk Road?

Ingrid Tersman: TheNew Silk Road has so many components. I think if the ultimate objective to connect the European and Chinese markets with the Caucasus and Central Asia could be met, it would be beneficial for all of us. Altogether, it is a huge project -- or projects -- that need considerable investment. I think we have to look at it part by part to see how it will materialize. The project on its grand scale requires billions in infrastructure investments. But connectivity brings economic activity and peoples together, and thus I trust it would be beneficial for the countries along the Silk Road, and also us in Europe.


CE: What could you say about your mission in Turkmenistan?

Ingrid Tersman: Contra to here in Baku, we do not have an Embassy in Ashgabat. So, my mission is to keep contacts with Turkmenistan and of course to strengthen the dialogue between our countries, also to work with the EU colleagues to strengthen the ties between the EU and Turkmenistan.


CE: Which economic projects between Azerbaijan, Turkmenistan and the EU do you find more promising?

Ingrid Tersman: The Trans Caspian Pipeline is of course a very relevant economic project, when it is built, and of relevance for all three parties.


CE: The launch of its construction has been delayed for over 20 years…

Ingrid Tersman: I think the construction of the pipeline is not a difficult task. I think agreements surrounding the pipeline remain the challenge. The European Union is working together with the littoral states of the Caspian Sea on this issue, as it is important also for us.


CE: Do you think it will be possible to solve this problem? Does Sweden support the solution of this problem?  

Ingrid Tersman: We support the European Union’s effort, because this is also a matter of energy security and diversification of energy and imports. And I think if there is a true political will, of course this can be solved.


CE: Ms. Tersman, what do people in Sweden think of Brexit

Ingrid Tersman: Most people really regret the outcome of the referendum in the UK and our Prime Minister said that we really regret about the outcome, but we respect the vote of the British people. Of course the EU27 will be different from the EU28. It is important for the EU and the United Kingdom to find ways to continue to be excellent partners in many areas. At the same time, only the negotiations can define the legal relationship between us, and they have not commenced yet. The EU and the UK will continue to share strategic objectives and interests. The referendum in the United Kingdom, however, clearly showed that issues closer to citizens’ hearts should be at the forefront of politics, both local and European: delivery on jobs, social welfare, economic growth, handling of the refugee crisis but perhaps also on climate issues. The EU needs to meet the needs of all its citizens, and the citizens need to feel that. 

Thank you for the interview

Interview made by Sabina Mammadova, Emil Mammadov

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