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TRANSPORT - Interview with Philip Mikos

EU NeighbourhoodInfo CentreAn ENPI project

TRACECA Investment Forum seeks to turntransport blueprints into real transport links

Talking about the Neighbourhood

How does the Investment Forum contribute to attracting investment?

National governments preselect particular transport projects o signifcance to the whole TRACECA cor-

ridor and then present blueprints o some o them to potential donors and investors at the orum. The

blueprints are a bit like an artists sketch o a house and are not detailed plans, but they do set out the costs

and returns in terms o 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 o the European Commission here is to acilitate this process

whilst bearing in mind the priorities in transport cooperation agreed by the EU and partner countries. TheCommission provides a team o consultants to support the setting up o the project prioritisation process

and the pre-selection o projects, which is undertaken by the countries themselves.

What are the criteria or selecting the projects to be presented at the orum?

Its frst and oremost their relevance or the region as a whole, and also environmental, technical and eco-

nomic 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 consi-

der has a potential to be unded.

How would a project typically receive unding rom donors or investors?

Projects are mostly unded through loans, or example rom the EuropeanBank or Reconstruction and Development (EBRD) or the European Invest-

ment Bank (EIB). The loan may be a 100% loan, or a partial loan, with the

rest o the unds co-fnanced by governments rom the region or by other

donors, as is the case o the Neighbourhood Investment Facility (NIF), which

combines grants and loans.

TRACECA (Transport Corridor Europe Caucasus Asia) is a strange animal, points out

Philip Mikos, Head o Unit o Regional Programmes Neighbourhood East at the European

Commission in an interview with the EU Neighbourhood Ino Centre. In a nutshell, it is an EU

programme and also an international multilateral agreement o 12 countries, both aiming to

develop a regional network o transport routes stretching rom China all the way to Europe,

dubbed the new Silk Road. The TRACECA programme supports partner countries in their

eforts to adopt modern standards and practices in the transport sector. It also helps attractinvestment into transport inrastructure, which is the main aim o the TRACECA Investment

Forum, says Philip Mikos.

This publication does

not represent the

ofcial view o the EC

or the EU institutions.

The EC accepts no

responsibility or

liability whatsoeverwith regard to its

content.

This is a series o interviews

with people involved in the

Neighbourhood, prepared

by the EU Neighbourhood

Ino Centre 2012

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EU NeighbourhoodInfo CentreAn ENPI project

The EU Neighbourhood Ino Centre is an EU-unded Regional Inormation and

Communication project highlighting the partnership between the EU and

Neighbouring countries. The project is managed by Action Global Communications.

What results came out o the frst Investment Forum (October 2010)?

In the frst orum there were over 160 participants coming rom TRACECA benefciary countries, the Euro-

pean Commission, international fnancial institutions, investors, operators and clients. As a result o the o-

rum, our projects have loan scheme appraisal or are being closely ollowed by IFIs, two have been fnanced

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 o market volati-

lity, as the IFIs and other investors have to study the fnancial plans and returns on the investment to takea decision.

Will the orum become a permanent eature?

It may become a permanent eature i partner countries and EU member states fnd it a useul event. Our

assessment o the frst orum was positive. We hope that the second one will result in more projects attrac-

ting investors. I the second orum is as successul as the frst one, well probably consider organising a third

one and then well see.

What type o projects ound investors at the frst orum?

Take or example the modernisation o a highway in Georgia. The EIB and the EBRD have expressed in-

terest in supporting this venture, as have the World Bank and the Asian Development Bank. Parts o this

highway around Zestaoni need rehabilitation, some stretches have to be rebuilt and some stretches have

to be built rom scratch. The project already receives EU support via the Neighbourhood Investment Faci-lity, which covers the easibility study phase. This is an example o how our cooperation mechanisms are

complementary to each other. The Investment Forum is not operating in a vacuum, but rather takes into

account what is already happening.

Another project illustrating our approach is the port o I lyichevsk in Ukraine. It envisages the rehabilitation

o the port. The idea here is that i, in the uture, Ukraine works out a sound transport strategy, perhaps it

should be linked to the extension o the Trans-European Transport Networks (TEN-Ts).

There is another link here worth mentioning - between TRACECA and the Eastern Partnership (EaP). The

TRACECA programme is part o the ramework or transport cooperation in the EaP, which also takes place

in the EaP Transport Panel.

One more EU cooperation mechanism can be relevant to TRACECA projects, namely budget support. It

may be used in certain cases or small-scale projects, when the government chooses to contribute its share

o co-investment using unds that it has received rom its sectoral transport-specifc budget line o budgetsupport.

How will TRACECA evolve in the uture?

Over time, the TRACECA programme has become a useul vehicle or regional cooperation and the multi-

lateral agreement has become the basis or a variety o cooperation initiatives among the countries that

go beyond the EUs TRACECA programme. The act that the Permanent Secretariat in Baku is unded by the

TRACECA countries (around 60,000 per year each) shows how important it is or the countries to have a

body bringing them together in addition to the EU TRACECA programme.

p. 2

EU Neighbourhood Info Centre - An ENPI project

Interview with Philip Mikos

The

Investment

Forum is not

operating in

a vacuum,

but rather

takes into

account what

is already

happening

TRACECA www.traceca-org.org/en/home/

TRACECA (Transport Corridor Europe-Caucasus-Asia) is an international transport cooperationprogramme 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 ramework

covers the areas o maritime transport, aviation, road and rail, transport security and transport

inrastructure.

Find out more

TRACECA fche www.enpi-ino.eu/maineast.php?id=272&id_type=10

Transport thematic portal www.enpi-ino.eu/themeeast.php?subject=8

First TRACECA Investment Forum may help propel Moldovan apples to European supermarkets

www.enpi-ino.eu/maineast.php?id=364&id_type=6&lang_id=450&subject=8

Over time,

the TRACECA

programme

has become

a usefulvehicle for

regional

cooperation

In Focus