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TRANSPORT - Interview with Philip Mikos

TRACECA Investment Forum seeks to turn

transport blueprints into real transport links

TRACECA (Transport Corridor Europe Caucasus Asia) is a strange animal, points out Philip Mikos, Head of Unit of Regional Programmes Neighbourhood East at the European Commission in an interview with the EU Neighbourhood Info Centre. In a nutshell, it is an EU programme and also an international multilateral agreement of 12 countries, both aiming to develop a regional network of transport routes stretching from China all the way to Europe, dubbed the new Silk Road. The TRACECA programme supports partner countries in their efforts to adopt modern standards and practices in the transport sector. It also helps attract investment into transport infrastructure, which is the main aim of the TRACECA Investment Forum, says Philip Mikos.
How does the Investment Forum contribute to attracting investment? National governments preselect particular transport projects of significance to the whole TRACECA corridor and then present blueprints of some of them to potential donors and investors at the forum. The blueprints are a bit like an artists sketch of a house and are not detailed plans, but they do set out the costs and returns in terms of social and economic development. We then invite IFIs (International Financial Institutions), banks, the private sector and national governments so that supply can meet demand. The role of the European Commission here is to facilitate this process whilst bearing in mind the priorities in transport cooperation agreed by the EU and partner countries. The Commission provides a team of consultants to support the setting up of the project prioritisation process and the pre-selection of projects, which is undertaken by the countries themselves. What are the criteria for selecting the projects to be presented at the forum? Its first and foremost their relevance for the region as a whole, and also environmental, technical and economic criteria. The project should have limited impact on the environment, it should be technically sound and conducive to economic development. Each project is presented individually, so eloquence and the capacity to impress the audience certainly matters, but in the end it is the banks and other donors and investors who decide which project they consider has a potential to be funded. How would a project typically receive funding from donors or investors? Projects are mostly funded through loans, for example from the European Bank for Reconstruction and Development (EBRD) or the European Investment Bank (EIB). The loan may be a 100% loan, or a partial loan, with the rest of the funds co-financed by governments from the region or by other donors, as is the case of the Neighbourhood Investment Facility (NIF), which combines grants and loans.

This publication does not represent the official view of the EC or the EU institutions. The EC accepts no responsibility or liability whatsoever with regard to its content.

This is a series of interviews with people involved in the Neighbourhood, prepared by the EU Neighbourhood Info Centre 2012

Interview with Philip Mikos EU Neighbourhood Info Centre - An ENPI project

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Over time, the TRACECA programme has become a useful vehicle for regional cooperation

What results came out of the first Investment Forum (October 2010)? In the first forum there were over 160 participants coming from TRACECA beneficiary countries, the European Commission, international financial institutions, investors, operators and clients. As a result of the forum, four projects have loan scheme appraisal or are being closely followed by IFIs, two have been financed by the national governments and several countries are in investment negotiations. The process leading to projects materialising on the ground takes time, especially in the present circumstances of market volatility, as the IFIs and other investors have to study the financial plans and returns on the investment to take a decision. Will the forum become a permanent feature? It may become a permanent feature if partner countries and EU member states find it a useful event. Our assessment of the first forum was positive. We hope that the second one will result in more projects attracting investors. If the second forum is as successful as the first one, well probably consider organising a third one and then well see.

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What type of projects found investors at the first forum? Take for example the modernisation of a highway in Georgia. The EIB and the EBRD have expressed interest in supporting this venture, as have the World Bank and the Asian Development Bank. Parts of this highway around Zestafoni need rehabilitation, some stretches have to be rebuilt and some stretches have to be built from scratch. The project already receives EU support via the Neighbourhood Investment Facility, which covers the feasibility study phase. This is an example of how our cooperation mechanisms are The complementary to each other. The Investment Forum is not operating in a vacuum, but rather takes into Investment account what is already happening. Another project illustrating our approach is the port of Ilyichevsk in Ukraine. It envisages the rehabilitation Forum is not of the port. The idea here is that if, in the future, Ukraine works out a sound transport strategy, perhaps it operating in should be linked to the extension of the Trans-European Transport Networks (TEN-Ts). a vacuum, There is another link here worth mentioning - between TRACECA and the Eastern Partnership (EaP). The but rather TRACECA programme is part of the framework for transport cooperation in the EaP, which also takes place takes into in the EaP Transport Info eighbourhoodPanel. Centre account what One more EU cooperation mechanism can be relevant to TRACECA projects, namely budget support. It may be used in certain cases for small-scale projects, when the government chooses to contribute its share is already of co-investment using funds that it has received from its sectoral transport-specific budget line of budget happening support.

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How will TRACECA evolve in the future? Over time, the TRACECA programme has become a useful vehicle for regional cooperation and the multilateral agreement has become the basis for a variety of cooperation initiatives among the countries that go beyond the EUs TRACECA programme. The fact that the Permanent Secretariat in Baku is funded by the TRACECA countries (around 60,000 per year each) shows how important it is for the countries to have a body bringing them together in addition to the EU TRACECA programme.

In Focus

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TRACECA www.traceca-org.org/en/home/ TRACECA (Transport Corridor Europe-Caucasus-Asia) is an international transport cooperation programme between the EU and its Partner countries in Eastern Europe, South Caucasus and Central Asia. It has a permanent Secretariat in Baku, Azerbaijan. The cooperation framework covers the areas of maritime transport, aviation, road and rail, transport security and transport eighbourhood Info Centre infrastructure. Find out An ENPI more project TRACECA fiche www.enpi-info.eu/maineast.php?id=272&id_type=10 Transport thematic portal www.enpi-info.eu/themeeast.php?subject=8 First TRACECA Investment Forum may help propel Moldovan apples to European supermarkets www.enpi-info.eu/maineast.php?id=364&id_type=6&lang_id=450&subject=8

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