European union

EUROPEAN UNION Delegation to the Republic of Azerbaijan

Overview of Bilateral EU Support to Azerbaijan (updated February 2013)

1) Background

Between 1992 and 2010, EU support to AZ amounted to just over €475 million, with annual allocation reaching around €20 million over the last few years.

EU assistance has changed over time. Initial assistance during the 1990's and early 2000's focused on humanitarian aid, food security and social protection. Following political stabilisation in AZ and the arrival of new instruments under the ENPI in 2007, EU assistance has shifted towards the implementation of the ENP Action Plan, diversification of the non-oil economy, and capacity building of government structures, although it still maintains a focus on poverty reduction and social protection.

Since 2009, the EU also supports CSO implemented actions under the Human Rights, Democratisation and Non State Actor budget lines (EIDHR and NSA-LA financing).

2) ENPI assistance 2007-2013 - €68m + €75m

The National Indicative Programme (NIP) for the period 2007-2010 foresaw an indicative budgetary allocation of €92m, although only €68m were committed. The follow-up NIP for 2011-2013 foresaw an indicative budgetary allocation of €122.5m, but reductions applied due to the cancellation of a budget support programme on Public Finance Management (PFM) under AAP 2012 and further cuts under AAP 2013, resulting in a final commitment of only €76m for the NIP 2011-2013.

This allocation includes €19m for the Comprehensive Institution Building (CIB) Programme, intended to assist a limited number of core institutions central in preparing for and implementing on-going and future Agreements under the Eastern Partnership and €9m for the PRDP (Pilot Regional Development Project).

The main instruments for implementing the ENPI assistance are Budget Support and Twinning.

Budget Support and accompanying Technical Assistance (€64m)

Since 2007, the EU has committed funds to four budget support programmes, namely: €14m for Energy in 2007; €16m for Justice in 2008; €14m for Agriculture in 2009; and €20m for Regional Development in 2011.

Bureaucratic administrative procedures and difficulties in assessing PFM eligibility have resulted in significant delays in initiating the BS programmes, although they are now picking-up: to date, regular annual payments were made under the Energy and Justice Programmes, and a first payment under Agriculture. In 2012, €11,6 m were disbursed in budget support to the Government of Azerbaijan out of total €19,5 m.

The €20m Rural Development Budget Support Programme developed under AAP2011 will begin this year. Its purpose is to develop labour and entrepreneurship potential in rural areas so as to meet demand of rural businesses to accelerate their integration in the world economy.

During 2012, a significant setback was experienced with the €22,5M Public Policy Reform Programme SPSP foreseen under AAP2012. Developed in close consultation with the Government as a means to ensure a long term PFM reform process, unexpectedly, the Government refused to endorse the programme at the last minute, leading to its cancellation and loss of the funds.

This setback has also had the impact of cancelling the Budget Support component initially foreseen in AAP2013, and has led to a loss of those funds as well.

Twinning (€24m)

The Twinning instrument continues to be very successful, with one of the highest implementation rate in the Region. Currently 27 twinning projects (including a Twinning light project) are under different stages of implementation: eight have been completed, eleven are on-going and 10 under preparation. During 2012, five Twinnings were signed and with one expected to be signed in Q1 2013. Twinning fiches for six projects to be financed under AAP 2010 are under development. Identification of a further nine projects to be funded under AAP2011, is ongoing. Some 34 applications were received for TAIEX in 2011 against 20 received in 2010, showing a better understanding and use of the instrument by the AZ authorities.

An evaluation of the Twinning instrument in Azerbaijan was carried-out in 2012, confirming the positive results highlighted above. The evaluation made also some detailed recommendations on how to further improve the political relevance and the effectiveness of the instrument in the AZ context.
Comprehensive Institution Building programme (CIB)

The CIB supports the implementation of the new agreements offered under the Eastern Partnership, and is based on three Institutional Reform Plans (IRPs), the first of which focuses on deepening trade integration & on the Association Agreement (IRP1); the second on rule of law, human rights & migration (IRP2), and the third one on training of civil servants on EU affairs (IRP3). A total €19m has been allocated to the CIB in 2011-2013, with a first €3m earmarked under AAP2011 (signed in 2011) and another €7m under AAP 2012.

In terms of current status, IRP1 is at the final stage of approval with Government adoption expected in early 2013. IRP2 was approved by the GoA in July 2012, and IRP3 was approved in April 2012. At this stage activities have only begun under IRP3, where a FWC to support the Beneficiaries (Azerbaijan Diplomatic Academy and Civil Service Commission) in IRP3 implementation has started in October 2012.

Pilot Regional Development Programme (PRDP)

The PRDP instrument promotes regional development in Azerbaijan along the lines of EU regional cohesion policy, with a focus on reduction of disparities between regions. With a €9M budget for 2011 - 2013, its objective is to finance projects in line with a country's regional development strategy, or if the strategy lacks sufficient quality, support development of it. In October 2012, a techical assistance project has started with the aim of assisting the Ministry of Economic Development in advancing the regional development agenda and in designing the various component of the PRDP programme.

2) Civil Society Grant Programmes (EIDHR , NSA/LA, CSF) since 2007 – €7.6m

The EU is the largest foreign donor supporting civil society in Azerbaijan. Under the Non-State Actors (NSA) Instrument and European Instrument for Democracy and Human Rights (EIDHR), between 2007-2011, 39 projects with a total EU contribution of €7.2m have been funded. Themes of the last call for proposals included support to human rights and democracy, human rights defenders, environment, and assistance to vulnerable groups.

In addition, in 2011, under the recently introduced Neighbourhood Civil Society Facility (CSF), the Delegation allocated €0.5m to 2 projects in areas of good governance and monitoring Public Finance Management to complement the originally planned PFM Budget Support Programme.

A call for the EIDHR instrument was launched in late 2012, and a call for the NSA instrument expected this year, for a combined total of €3m. Positive to note is the increase of funding to civil society through these calls in comparison to the past.

Annexes

Table 1: Overview National Indicative Programme (NIP)

	NIP 2007 – 2010 (€92M)				NIP 2011 – 2013 (€122.5M)
	2007	2008	2009	2010	2011	2012^* (indicative)	2013^* (indicative)
BS	€14M	€16M	€14M	-	€20M	-	-
TW/TA	€5M	€6M	€6M	€7M^**	€11M^**	€19.5M^**	€25.5M^**
	€19M	€22M	€20M	€7M	€31M	€19.5M	€25.5M
Total				€68M			€76M

* FA not yet signed by GoA BS: Budget Support + Accompanying Technical Assistance

** Includes CIB TW/TA: Twinning/Technical Assistance Facility

Table2: Overview of Budget Support Programmes

Financing Decision	Programme Title	Budget	Time period	Status
AAP2007	Energy Reform Support Programme	€13m BS + €1m TA	2009-2012	1^st tranche paid 2010 2nd tranche paid 12/2011 3^rd and final tranche paid in 12/2012 Programme completed
AAP2008	Justice Reform Support Programme	€14.5m BS + €1.5m TA	2011-2013	First tranche paid 11/2011 2nd paid 12/2012 3^rd and final tranche expected end 2013
AAP2009	Agriculture and Rural Development Support Programme	€13m BS + €1m TA	2012-2014	First payment of €3 m executed in October 2012
AAP2011	Rural Development Support Programme	€19.5m BS + €0.5m TA	2012-2014 (expected)	GoA approval on 12/2012 1^st tranche expected S2/2013
AAP 2012	Public Finance Policy Reform Programme	€21.5m BS + €1m TA	2013-2015	Cancelled due to lack of GoA support.

Table 3: Budget Support Programme Details

AAP2007 Energy Reform Support Programme €14m
Purpose	To support implementation of GoA's key priorities in the energy sector, as listed in the MoU on a Strategic Partnership between the EU and the Republic of Azerbaijan in the field of energy (MoUE), with a view in particular to (1) increasing energy security by diversifying energy sources and (2) paving the way for energy sustainability.
Status	The programme is completed, with three tranches paid for a total of €11.75m out of a possible €13m for budget support (+ €1m for TA). The main result is the establishment of the ABEMDA (renewable energy Agency) and the preparation of the strategy and regulatory framework for RES and EE. Full payment was withheld as sectoral strategies, action plan and legislation, although developed, had not yet been approved by the Government.

AAP2008 Justice Reform Support Programme €16m
Purpose	To support the modernisation of Justice sector in Azerbaijan by (1) improving capacities of Regional Justice Divisions; (2) Supporting development of Academy of Justice; (3) Improving conditions in State Penitentiary Sector.
Status	Two payments have been made under this programme, in 2011 and 2012 respectively. The main results so far include initiation or reforms in the Academy of Justice and initiation of providing improved conditions for prisoners in the penitentiary system. The final tranche is expected to be paid in late 2013.

AAP2009 Agriculture and Rural Development Support Programme €14m
Purpose	To promote sustainable agricultural and rural development in order to diversify economy of Azerbaijan by supporting: (1) Increased access to safe food; (2) Improving risk management of food supply; (3) improving business environment to support more entrepreneurship in the are of agriculture and rural development.
Status	First Fixed Tranche Payment Request (3m) paid in October 2012, with the second tranche expected in late 2013.

AAP2011 Rural Development Support Programme €19.5m
Purpose	The two specific programme objectives are (1) rapid development of the labour and entrepreneurship potential in the rural areas, able to meet demand of rural businesses to accelerate their integration in the world economy; (2) MoED coordinating rural development effectively and efficiently.
Status	The GoA approved the programme in 12/2012, and the request for first payment is expected in early 2013.

Table 4: Overview of Twinning projects

Financing Decision	Twinning Budget	Amount of Projects	Status
AAP2006	€5.5M	5	5 projects completed
AAP2007	€5M	5	1 Project on-going, 4 completed
AAP2008	€6M	5	All Projects ongoing
AAP2009	€6M	6	5 projects on-going, 1 to start early 2013
AAP2010	€6M	6	Projects identified, call for proposals S1/2013
AAP2011	€8M	9 (expected)	Projects to be identified Q3 2012

Table 5: Twinning Project Details

AAP2007
Title	Budget	End Date	Partner EUMS
Twinning Light for the Ombudsman	€0.25M	09/2011	Germany
Enhancing effectiveness and efficiency of social protection through improvement of the analytical and forecasting capacities of the Ministry of Labour and Social Protection of Population of the Republic of Azerbaijan	€0.7M	02/2012	France
Support to the State Statistical Committee of the Republic of Azerbaijan to reach european standards in national accounts, non-observed economy, business statistics and producer price index	€0.9M	03/2012	Germany/ Bulgaria
Support to the State Labour Inspectorate (SLI) in Occupational Health and Safety (OHS) enhancement in the Republic of Azerbaijan	€1M	12/2012	Germany
Assisting the Public Financial Control Service (PFCS) in improving a system of public financial control in the Republic of Azerbaijan	€1M	02/2013	Germany

AAP2008
Title	Budget	End Date	Partner EUMS
Support the State Veterinary Service Prepare for a National System for the Identification of Animals and Registration of Holdings	€1M	05/2013	Spain/ Poland
Support to the Ministry of Taxes in the field of Computer Assisted Audit system	€1M	02/2013	Netherlands
Strengthening the enforcement of intellectual property rights in the Republic of Azerbaijan	€1.1M	02/2013	Greece
Strengthening the capacity of the State Committee for Family, Women and Children Affairs of the Republic of Azerbaijan to Promote and Protect the Rights of Vulnerable Families, Women and Children	€0.9M	04/2013	France
Strengthening the Initial Vocational Education in the Field of Agriculture in the Republic of Azerbaijan	€1.2M	05/2013	Germany

AAP2009
Title	Budget	End Date	Partner EUMS
Support to the State Maritime Administration for strengthening the State Maritime Administration of the Republic of Azerbaijan in order to implement the EU and international legal requirements in the field of Maritime Safety	€0.9M	03/2014	Spain
Support to the State Committee for Securities Azerbaijan for Legal approximation and institutional development in the securities market of the Republic of Azerbaijan aligned with the EU acquis and practices	€1M	07/2014	Poland
Support to the State Agency on Nuclear and Radiological Activity Regulations under the Ministry of Emergency Situations for strengthening Radiation Safety Infrastructure and Development of Supporting Services	€0.9M	03/2015	Lithuania
Support to the State Migration Service for support to the professional development of the staff of the State Migration Service of the Republic of Azerbaijan and its subordinated agencies, and adjustment of legislation on migration to the EU standards	€1.05M	04/2015	Netherlands, Romania, Latvia
Support to the State Committee for Land and Cartography for improving the sustainability of the Land Registration System in Azerbaijan especially in the field of land evaluation	€0.9M	04/2014	Sweden, Latvia
Support to the Ministry of Culture and Tourism of the Republic of Azerbaijan for Strengthening the administrative capacity of the Department of Tourism under the Ministry of Culture and Tourism	€0.9M	Expected 05/2014	Austria, Lithuania

AAP2010

Title	Status
Support to the State Agency for Control of Safety in Construction in Transition to EU Construction Standards	Twinning Fiches all under development. Expected start date of activities:Q3 2013
Support to the State Social Pension Protection Fund in the Introduction of the Funded Element within the Insurance – Pension System in Azerbaijan
Improvement of the system of quality and safety control and certification of export products of plant origin and processed products
Support to the Ministry of Labour and Social Protection for development of medical and social rehabilitation based on advanced European experience for people needing special care;
Quality management, establishment of metal data and geographical information systems, development of methodology of a survey of income and living standards and expansion of statistics on disability at the State Statistics Committee according to the EU requirements and international standards
Strengthening the possibilities of the State Committee on Standardization, Metrology and Patent

Table 6: Ongoing Civil Society Grant Project Details

Financing Decision	Project Title	Implementing body	Budget	End date
NSA 07	Advancing Healthy Communities through responsive local Governance	OXFAM GB LBG	750,000 €	19/12/2012
NSA 09	Local Integration of Refugees and Asylum Seekers in Azerbaijan - Strategies for Improving lives in displacement	Dansk Flygtningehjaelp DRC	714,032 €	12/2012
HUM 09	Return and Resettlement - Children's participation in decision making	Dansk Flygtningehjaelp DRC	519,215 €	09/2012
NSA 08-09	Strengthening 20 village municipalities capability to provide public services (safe water supply) in the rural area of Garabakh lowlands of Central Azerbaijan	OXFAM GB LBG	336,605 €	20/11/2012
NSA 08-09	Early Intervention and Social Inclusion in society of children with special needs	Stichting Global Initiative On Psychiatry An International Foundationfor The Promotion Of Humane ETH	107,912 €	20/11/2012
NSA 08-09	Developing a model for cooperation between LA and NSA in introducing foster care and family support services	Hilfswerk Austria - Osterreichisches Hilfswerk Fur Internationale Zusammenarbeit	480,600 €	14/12/2012
ENV 09	Promoting Development of Sustainable Energy in Azerbaijan	United Nations Development Programme	500,000 €	03/07/2013
EIDHR 10	Developing civil society capacity for preventing discriminatory torture and ill-treatment	The Equal Rights Trust	150,000 €	28/05/2013
EIDHR 10	Support for Human Rights Defenders in Azerbaijan	Human Rights House	121,870 €	04/07/2013
EIDHR 10	Enhancing access to justice for internally displaced persons and strengthening civil society efforts to improve the national response in Azerbaijan	Praxis Support to Social Development Public Union	144,000 €	31/12/2013
EIDHR 10	Public Awareness Campaign on Domestic Violence	Public Union for Gender Equality and Women's Initiatives	108,000 €	09/11/2013

EIDHR 10	Capacity Building for Citizen Participation and Increasing Accountability of Elected Bodies	Election Monitoring and Democracy Studies Center	120,374 €	06/04/2013
EIDHR 10	Youth School of Liberal Values	Intelligent Citizen	104,000 €	18/11/2013
EIDHR 10	Energizing Environmental Agenda in Azerbaijan through Empowered Media and Civil Society Efforts	Internews Azerbaijan Public Association	148,000 €	04/07/2013
EIDHR 10	Youth Houses as a Platform to Enhance Youth Participation in the Environment	UNICEF	150,000 €	04/01/2014
NSA 10	Enhancing the livelihoods of IDPs in the Goranboy district through tangible agricultural advancement	Ganja Agribusiness Association	208,602 €	05/12/2013
NSA 10	Intra-community dialogue for inclusive community development	British Council	190,781€	09/01/2014
NSA 10	Empowering Mental Health service users in 5 regions of Azerbaijan	Globali Initiativa pcychiatry	164,359 €	30/11/2013
NSA 10	Sustainable development of a village: Civil Society – Municipality Co-operation Model (COSMO)	Independent Consumers Union	197,305 €	05/12/2013
NSA 10	Special Economic Action for the Blind	Save the Children Netherland	193,744 €	14/08/2013
NSA 10	Social Rights Development – community-based strategies to include vulnerable and isolated children to pre-school education	United Aid for Azerbaijan	250,000 €	01/01/2014
CSF 11	The effective system of public finances control (ESPFC Project)	Entrepreneurship Development Foundation	202,500 €	14/05/2013
CSF 11	Your Money, Your Future: Improving public finance policy and management in Azerbaijan	OXFAM	241,052 €	17/03/2014

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