THE BALKAN VECTOR

Baku's efforts on the Balkans in 2022 were one of the most important, successful and brightest foreign policy moves of Azerbaijan.

This rapid rapprochement between Azerbaijan and the Balkan countries has been the first in the thirty-year history of relations between our countries.

First stop on the Balkan route

The first important step has been taken toward cooperation with Bulgaria. On September 30, 2022 President Ilham Aliyev visited Sofia. Bulgaria, Greece and Italy are key countries in terms of Azerbaijani gas supplies to Europe.

President Aliyev’s visit to Sofia was the continuation of Baku’s policy of further rapprochement with its strategic partners in Europe after his visit to Italy a few weeks before.

On September 30, presidents Rumen Radev of Bulgaria and Ilham Aliyev of Azerbaijan confirmed that three other European countries—Romania, Hungary and Slovakia—had approached Sofia showing an interest in additional volumes of Azerbaijani gas.

The talks in Bulgaria mainly focused on the volumes and parameters of gas and electricity supplies and the prospects for cooperation in transport, investment and other areas.

The EU gas pipeline system has been developed in line with the European Union's strategy of increasing Sofia's importance as a hub for gas supplies to the south-eastern Balkans and other eastern European states. Baku is referred to as a reliable friend thanks to the implementation of agreements signed fourteen years ago, which the parties have been pursuing consistently over the years.

Bulgaria is so far the only EU country importing electricity from Azerbaijan. It can also become a gateway for Azerbaijani electricity to other European countries.

The Baku-Sofia energy link is in conformity with the principles of partnership between Azerbaijan and the EU, as stipulated in the Memorandum on Energy Cooperation signed in Baku in June 2022.

On October 1, Bulgarian President Radev, during the official opening ceremony of the Interconnector Greece-Bulgaria (IGB), informed the President of European Commission Ursula von der Leyen of the initiative of Romania, Hungary and Slovakia to increase supplies of Azerbaijani gas using the domestic infrastructure of these countries. Now this infrastructure needs to be constructed further to deliver natural gas to Central Europe.

Baku supports the initiative. Speaking at the ceremony in Sofia, President Aliyev noted that Baku has already started consultations with its partners regarding the expansion of TANAP’s throughput capacity from 16 to 32bcm, and TAP from 10 to 20bcm, as it will be difficult to ensure additional supplies to Europe otherwise.

Now it is required that the European Commission provides not only political support for this idea, but also additional funds to make the relevant infrastructure ready for supplies. It seems that we can expect a decision on this issue shortly.

 Between Albania and Serbia

The subject of expanding the energy partnership was also raised a month and a half later, on November 15, during Ilham Aliyev's visit to Albania.

Following the successful implementation of the Trans Adriatic Pipeline project together with partners, Tirana and Baku are looking forward to continue this cooperation, as Albania is interested in it more than Azerbaijan. After all, this Balkan country wants to transform itself from a gas transit country into a gas beneficiary using the gas received for domestic needs through its own gas pipeline system.

It is well known that the state-run company SOCAR of Azerbaijan is involved in the gasification project in Albania. The construction of domestic gas grid has just started. It is believed that in a few years Albania will be able to use natural gas transported via TAP for power generation and to diversify its energy sources in other sectors.

In addition, Albania is willing to promote the Ionian-Adriatic Gas Pipeline (IAP) by connecting it to TAP. Connecting Albania's gas grid with Montenegro, Croatia and Bosnia can turn the country into a regional gas transportation hub of geostrategic importance in the Western Balkans and Europe.

To intensify its relations with Albania Azerbaijan decided to open an embassy in Tirana, which also indicates the increasing role of this country in Baku's foreign policy.

President Aliyev’s visit to Serbia after a week (November 23) following his visit to Albania demonstrates that the Balkans are gradually becoming a priority in Azerbaijan's foreign policy.

Baku and Belgrade signed a number of important agreements that contribute to the strategic cooperation between the two countries taking it to a higher level. In particular, the presidents of Azerbaijan and Serbia signed a Memorandum on the Establishment of Strategic Partnership Council between the Republic of Azerbaijan and the Republic of Serbia, which translates the bilateral dialogue into concrete decisions on the most important areas of cooperation.

Accelerated implementation of energy projects between the countries is expected to create a unified energy infrastructure that will strengthen Serbia's energy security.

Due to the increasing demand of Europe in alternative energy sources, Azerbaijan offers its oil, gas and electricity to European states on favourable terms. Earlier Belgrade and Baku have agreed on energy supplies from Azerbaijan to Serbia.

On the day of Ilham Aliyev's visit to Serbia, the operator of state gas network Bulgartransgaz announced a €49m-worth ($50.6m) tender in bank financing to cover the investment costs of building the Bulgarian section of the pipeline to Serbia.

The parties also agreed to intensify business contacts through the implementation of joint projects. The legal basis for this cooperation is the MoU signed between the Small and Medium-sized Business Development Agency of the Republic of Azerbaijan and the Serbian Development Agency.

Azerbaijan and Serbia will continue to support each other on issues related to territorial integrity of each other. During his stay in Tirana, Ilham Aliyev reportedly made it clear to the Albanian leadership that Baku would not support the issue of Kosovo, and confirmed this at a meeting in Belgrade. President Vucic praised the Azerbaijani president's position on this issue.

It is worth mentioning the relationship of trust and friendship between the Serbian and Azerbaijani heads of state. Baku regarded the Serbian Air Force's escort of the Azerbaijani Air Force One, as well as President Vucic's personal meeting and seeing off President Aliyev at the airport as a sign of special respect.

Green corridor to Romania

On December 17, President of Azerbaijan made a working visit to Romania to participate in a plenary session on the signing of the Agreement on Strategic Partnership for the Development and Transfer of Green Energy between the Governments of the Republic of Azerbaijan, Georgia, Romania and Hungary.

Contacts on economic and energy issues have been active during the past year. In June, Romanian Energy Minister Virgil Popescu visited Baku, and in the same month Azerbaijan hosted the sixth meeting of the joint commission on trade and economic relations and scientific and technical cooperation between the two countries. In September, at the 5th Romanian International Gas Conference in Bucharest, Azerbaijani Energy Minister Parviz Shahbazov announced plans to expand energy cooperation. Currently SOCAR owns 67 petrol stations in Romania and plans to increase this number, as well as investments in relevant local enterprises.

In addition, shortly after the launch of IGB, Azerbaijan signed an agreement for the transportation of Azerbaijani natural gas to Romania as early as January 2023. The potential for expansion of SOCAR's activities in Romania was highlighted.

The export of Azerbaijani electricity was also discussed in detail during President Aliyev’s visit to Romania. The deal should materialise through the implementation of a 1,195km-long  1,000MW cable connecting Georgia with Romania. This cable will be an extension of the high-voltage transmission line connecting Azerbaijan to the Black Sea coast of Georgia.

With the commissioning of new power plants in Azerbaijan, including those generating green energy, the country's energy export potential is increasing significantly. Thus, the export of electricity in 2021 reached a record 1,673.4m kWh. During 11 months of last year this number was 2,546.8m kWh, which is 83.6% more than during the same period in 2021. In other words, there was about a twofold increase by the end of 2022.

The EU member states, which are experiencing significant problems with their electricity supply, have a real interest in additional supplies. For Azerbaijan, the situation is extremely advantageous, as it justifies significant investments in its energy sector and makes it possible to diversify its sources of income.

Serbian hopes

On December 20-21, just before the end of 2022, Serbian president Alexander Vucic paid a working visit to Azerbaijan.

Obviously, the reason of intensifying contacts between the countries is the need to quickly address crucial issues related to Serbia's energy security amid pressure from Brussels on Belgrade to limit its engagement with Russia in the energy sphere.

In the very near future Serbia may face a situation where it will be unable to receive oil, gas and oil products from Russia, which Moscow used to sell to Belgrade at optimal prices. And the Serbian side is hoping to see Azerbaijan a stable energy partner of Belgrade.

On the eve of the visit, Serbian Energy Minister Dubravka Đedovic said they were considering reducing gas supplies from Russia to reduce dependence on Russian fuel. This involves hundreds of millions of euros for projects to supply fuel from Azerbaijan and connect with terminals in Greece. Thus, there is an ongoing construction of an interconnector with Bulgaria, which should be completed next year if Serbia receives the necessary funds.

The EU grant of €93m covers only half of the construction cost for the interconnector with Bulgaria. Serbia expects the EU support for laying additional pipes across the border, which can make the country an important transit route.

Belgrade also expressed its intention to join the previously concluded strategic partnership agreement on the development and transmission of green energy along the Black Sea bed from Azerbaijan through the territory of Georgia to Romania and Hungary. According to the President of Azerbaijan, we can expect practical steps to export Azerbaijani electricity to Serbia as early as next year.

Overall, Belgrade demonstrates willingness to reserve as much Azerbaijani gas and electricity as possible for itself given the emerging opportunities and growing demand.

Cooperation in the defence industry was also discussed during the visit. Both countries have potential in this area and we can expect practical steps in the near future to bring both sides together. During the visit, Serbian President also met with Azerbaijani Minister of Defense Industry Madat Guliyev. It is expected that the co-production of small arms and their export to third countries can form a basis for multifaceted cooperation in the military-technical context.

In addition, the two sides have discussed in detail the possibility of implementing investment projects in the energy, road construction, agriculture and transport sectors.

The countries have supported each other's territorial integrity and sovereignty, which cements their political dialogue. Both states actively cooperate with the EU, but are keen to defend their own views on how to structure domestic and foreign policy. 

"We both support international law and are confident that relations between the countries can only be regulated on the basis of the norms and principles of international law. Certainly, we are very concerned with the double standards observed around the world. The norms and principles of international law should be the basis for all countries,” President Aliyev said describing the common approach of Belgrade and Baku.

It is the primacy of international law that determines Azerbaijan's foreign policy vector, and its rapidly developing Balkan direction is a true manifestation of this.