The undersigned:

as Ministers with responsibility for Energy from the countries participating in the Balkans Energy Interconnections Task Force: Albania, Bosnia and Herzegovina, Bulgaria, Greece, Romania, the former Yugoslav Republic of Macedonia and Turkey, as Ministers with responsibility for Energy from the countries which have participated as observers in the activities of the Task Force or who have an interest in the Task Force's results:

Ukraine, Georgia, Armenia, Russia, Azerbaijan and Moldova, and the Member of the European Commission, Mr. Papoutsis, responsible for Energy; recognising:

• the strategic need for closer co-operation in the field of energy between the European Union and the Black Sea Region as well as between the Black Sea countries themselves;

• the key importance of encouraging energy interconnections between the countries concerned;

• the added value of the Task Force in promoting the efficiency and co-ordination of investment initiatives regarding energy interconnections in the electricity, gas and oil sectors in the South-eastern European region;

• the contribution of the European Commission for having financed the activities of the Task Force through the SYNERGY programme and also that of the Black Sea Regional Energy Centre, in the framework of which the Task Force operated;

• the contribution of the representatives of European energy industries, as well those of the European Investment Bank and the European Bank for Reconstruction and Development, which participated in the Task Force activities;

and having been informed of the Task Force activities since its inception on September 24th l996; having accepted fully the methodology of the Task Force, and having taken note of and been satisfied by the conclusions of the Task Force results;

give their full endorsement to the results of the Task Force and to the categorisation of the evaluated common interest projects, the list of which is annexed to this declaration, and the justification of which, per sector, is as follows:

Electricity sector

Category A: projects which have a high maturity and which are needed to integrate the region's national electricity networks with the UCPTE system;

Category B: projects which me less mature and which me useful to integrate the region's national electricity networks with the UCPTE system and to develop regional inter-operability;

Category C: is given to projects that need to be studied further.

In addition, the undersigned recognise the work currently taking place (with the assistance of TACIS and the Trans-European Networks programmes) on the interface and the interconnection between the UCPTE and the electricity systems of the Russian Federation, Ukraine and Moldova.

Oil Sector

Category A: projects which aim at facilitating oil exports from Russian and Caspian reserves, as well as those improving oil supplies to local markets.

Category B: projects of a lower maturity.

Gas Sector

Category A: relative mature and low-risk projects (the implementation of some of which has already begun) which envisage an increase in supply to existing markets with foreseeable increases in demand.

Category B: less mature projects (not yet having entered the construction stage) designed to bring gas to new markets hitherto unsupplied and which also contribute to creating interconnections between Balkan countries thereby helping the development of a regional gas network and to increase security of supply and diversification of supply sources.

Category C: higher risk cross-border interconnection projects in a preliminary phase.

In addition, it is recognised that a number of projects submitted for consideration me of interest to warrant the further attention of the participating countries due to their interrelation with and consequential effects on the above projects. The list of these projects is also attached.

It is also recognised that the results and on-going activities of other projects which me promoting regional co-operation in the energy sector, in particularly the work of the INOGATE project, need to be taken into consideration, and co-ordination between such initiatives enhanced.

The Task Force brought to light three important issues: firstly that of the impact of energy projects to the environment of the Black Sea coast, secondly that of underground gas storage, and thirdly, the need to integrate national electricity markets. These issues have hitherto been considered only nationally, and it is recognised that that they should be considered in a regional context in any follow-up activities linked to the work of the Task Force.

The undersigned:

• will consider all available possibilities to finance the projects selected by the Task Force;

• call upon the International Financial Institutions (particularly the European Investment Bank and the European Bank for Reconstruction and Development) to take into consideration the results of the Task Force when granting financing;

• call upon the energy industry, through the energy industry representatives, to speed up the processes which will permit investment in these projects.

Furthermore, endorsement of the results of the Task Force is granted by the undersigned, as Ministers responsible for energy on behalf of their government, confirming an interest in developing and strengthening energy interconnections, and in continuing work begun in the Task Force context.

In particular, a special consideration is given to targeting resources to and promoting investment in those projects which have been identified as more mature in order to ensure their implementation, whilst accepting that this prioritisation is a process and is therefore the result of an evaluation of the available data and the current circumstances, and consequently recognising that if the data or the circumstances change, the prioritisation should be modified consequently.

With this in mind, the undersigned recommend continuing the work of the Task Force under the co-ordination of the European Commission in order to exchange information and promote common efforts in the development of the region's energy infrastructure, ensuring complementarity with other initiatives focusing on the same or neighbouring regions.

This memorandum does not create rights and obligations under international undersigned; it is intended as a declaration of political intention.

Contents

Signatures of the participating countries ministers.

Categorisation of Energy interconnection Projects of Common Interest.

List of Projects of consequence to the Balkans, requiring further study.

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National and Kapodistrian University of Athens
Energy Policy Group

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