VZCZCXRO5609
RR RUEHLN RUEHVK RUEHYG
DE RUEHKB #0080/01 0310402
ZNR UUUUU ZZH
R 310402Z JAN 08
FM AMEMBASSY BAKU
TO RUEHC/SECSTATE WASHDC 4671
INFO RUCNCIS/CIS COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 2601
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 BAKU 000080 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EEB A/S DANIEL SULLIVAN 
DEPT FOR EUR/CARC AND EEB/CBA 
DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER 
ANKARA FOR FCS 
COMMERCE FOR 4231 ITA/MAC/ORUE FOR DSTARKS 
COMMERCE FOR 3004 ITA/FCS/ ADVOCACY FOR ACHAMS-EDDINE 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ETRD EAID PREL ENRG KCOR AJ
SUBJECT: EEB/CBA SPECIAL REPRESENTATIVE MERMOUD DISCUSSES 
EPC AND CO-FINANCING WITH FINANCE MINISTER SHARIFOV 
 
REF: 07 BAKU 1506 
 
SENSITIVE BUT UNCLASSIFIED -- NOT FOR INTERNET DISTRIBUTION 
-- PLEASE HANDLE ACCORDINGLY 
 
¶1. (U) This is an action request.  Please see paragraph 5. 
 
¶2. (SBU) In a meeting on January 22, Department of State 
Special Representative for Commercial and Business Affairs 
Frank Mermoud, the Ambassador and Minister of Finance Samir 
Sharifov discussed preparations for the second annual 
Economic Partnership Commission meeting in Washington. 
Sharifov agreed to the proposed April time period for the 
EPC, noting however that there are other international 
organization meetings around the same time that could 
conflict with different ministries' participation.  Mermoud 
and Ambassador Derse outlined possible EPC agenda items with 
Sharifov, including the GOAJ's economic reform agenda, trade 
and investment reforms, legislative reforms, anti-corruption 
measures and incorporating a private sector dialogue. 
Sharifov had no problems with holding the EPC over one and a 
half days and welcomed more participation from the private 
sector. 
 
¶3. (SBU) Sharifov told Mermoud that he was open to agenda 
items and looked to the U.S. for advice on which ministries 
from the GOAJ should be invited.  He said that he would like 
to begin the EPC by reviewing the status of action items 
included in the 2007 EPC communique.  Sharifov said he would 
raise the lack of results from his meetings with private 
sector companies during his October visit to Washington. 
Specifically, Sharifov said he wanted to discuss the lack of 
progress in purchasing GE turbines with Export-Import bank 
credits.  Mermoud said that he would ask GE for the latest in 
order to respond to the Minister. (NOTE: Embassy hopes to 
have an answer from GE for Minister Sharifov well in advance 
of the April EPC.)  Sharifov briefed Mermoud on developments 
in the domestic energy power sector, including a new power 
station project in which U.S. company AES is looking to 
participate. 
 
¶4. (SBU) Mermoud and Sharifov also discussed the status of 
U.S.-Azerbaijan co-financing efforts.  Sharifov said that the 
U.S. side should arrange a meeting with Deputy Minister of 
Finance Fatyzadeh who has the lead on the co-financing issue 
to discuss details.  Sharifov said that the GOAJ has no 
problems with co-financing but needs to complete several 
bureaucratic issues before finalizing any framework.  (Note: 
On January 24 the Embassy co-financing group, led by the DCM, 
met with Fatyzadeh to discuss details on co-financing.) 
Ambassador Derse told Sharifov that the U.S. would like to 
sign a memorandum of understanding encompassing all of the 
co-financing projects including a plan for the next three to 
five years at the April EPC meeting.  Sharifov told the 
Ambassador that the GOAJ has allocated USD 1.5 million in the 
2008 budget for initial co-financing activities. 
 
¶5. (SBU) Sharifov said he would welcome receiving from the 
USG for GOAJ consideration a draft MOU on co-financing, a 
draft EPC agenda, a draft EPC joint communique, and details 
on the proposed EPC program, including a private sector 
session. 
 
¶6. (SBU) Action Request:  In order to spur GOAJ preparations 
and concrete results at the April EPC, we need to pass to the 
GOAJ as soon as possible the Washington approved draft EPC 
agenda for GOAJ comments and feedback (our proposed ideas 
submitted reftel).  Embassy requests that Washington provide 
soon the proposed EPC agenda so we can forward to the GOAJ 
for comment; ideally under cover of a letter from A/S 
Sullivan also offering proposed dates for the meeting and 
program of activities - including a session with the private 
sector and a trilateral meeting with Turkey.  We feel that 
delivering the draft agenda will build momentum in the entire 
GOAJ to begin focusing and preparing for this important 
bilateral event.  In addition, Embassy will prepare a draft 
2008 EPC communique for Department and Washington agencies' 
comments and review (septel) that we also need to pass as 
soon as possible to the GOAJ to focus efforts on concrete 
deliverables. 
 
 
BAKU 00000080  002 OF 002 
 
 
¶7. (U) EEB/CBA Special Representative Mermoud cleared this 
cable. 
DERSE