Nexus Regional Dialogue Central Asia // European Union promotes Nexus approach to facilitate green investments in Central Asia.
May 11 2023
This article was initially published on the CAREC website on February 22th 2023.
Rome, Italy- The investment needs and opportunities for the Water-Energy-Food (WEF) Nexus projects were discussed by the representatives of the European Union (EU), Central Asian (CA) countries, International Financial Institutions (IFIs) and development partners during a special event, held in February 22, 2023 in Rome (Italy) in the lead-up to the 7th EU-Central Asia High-Level Conference on Environment and Water Cooperation.
Exploring investment modalities: Examples from Tajikistan and Kazakhstan
The investment proposals developed in the framework of the European Union project “Nexus Dialogue in Central Asia” (Phase II) require various investment modalities. The cleaning and recycling of the Ruslovoe reservoir sediments at the Tyamuyun Hydroelectric Complex best suits the private-public partnership (PPP) scheme.
Tajikistan demo project attracts the financing from the development partner under favorable financial conditions as the national legislation does not allow the PPP scheme for strategic facilities: “Thanks to the Nexus demo project, our project team timely conducted a relevant technical and analytical assessment that was used to develop the Feasibility Study for modernization of the Golodnostep Pumping Station in Tajikistan with the support of the interested donor. Grant projects provide a substantial technical assistance. In the long run, however, we should strive to employ all possible financing mechanisms, including PPPs in the field of land reclamation and irrigation,” noted Mr Bakhrom Gaforzoda, Secretary of the National Commission for Irrigation and Drainage under the Agency for Land Reclamation and Irrigation under the Government of the Republic of Tajikistan.
Furthermore, Kazakhstan is the first in the region to begin piloting the application of offsets to attract financing for afforestation of the drained bottom of the Aral Sea.
The CA countries’ representatives shared their observations on the bottlenecks in attracting investment with potential investors. Nexus-based projects strive to improve water-energy-food security through the efficient use of natural resources. However, attracting investment to finance such projects requires new approaches, including adequate tariffs for water and innovative lending instruments. We also need reinforced multi-sector cooperation with financial institutions and private business.
EU prioritizes the WEF nexus approach
Mr Johannes Baur, Head of Cooperation at the EU Delegation to Kazakhstan stated that the Sustainable water and energy are key priorities for the EU in Central Asia. In line with the EU Green Deal, the Union promotes a more efficient and coordinated use of such vital resources as water, energy and food. The Nexus approach helps find optimal solutions to ensure that actions in one sector positively contribute to progress in other sectors. The European Union is fully committed to support the green transition through viable investment projects to contribute to the region’s long-term resilience, peace and prosperity.
Nexus Regional Dialogues in Central Asia
CAREC implements the “Nexus Dialogue in Central Asia” project in partnership with the Global Nexus Secretariat with the financial support of the European Union. The project’s duration: June 2020 – June 2023; total budget: EUR 1.25 million, including the EU’s contribution of EUR 1 million.
The second phase (2020-2023) of the European Union project “Central Asian Dialogue to Promote Sectoral Financing through the Water-Energy-Food Nexus” is a continuation of the first phase (2016-2019) and is being implemented by the Regional Environmental Centre for Central Asia (CAREC). The project’s duration: June 2020 – May 2023; total budget: EUR 1.25 million with the EU’s contribution of EUR 1 million. The project is a part of the global Nexus Dialogue Programme, which is supported by the European Union (EU) and the German Federal Ministry for Economic Cooperation and Development (BMZ) in five regions. •