CENN – NOVEMBER 8, 2004 DAILY DIGEST
Table of Contents:
1. Development of Local Capacities and Public Awareness for Better
Energy Governance
2. EBRD, SOCAR Agree Shah Deniz Credit Terms
3. Rural-tourism to Promote Georgia’s Provinces
4. Armenian Company Leads Talks on Chemical Giant’s Future
5. USAID Allocates $600,000 For Implementation of Heating Program at 15
Schools in Armenia
6. Contest in Armenia to Honor Special Reports on Georgia
7. Noubarashen School #11 To Receive Orchard from HSBC Bank Armenia and
Armenia Tree Project
8. Personal Business Poisoning the Society
9. Those Having Dollars Can Cut Trees
10. A Bio-Energy Superpower

1. DEVELOPMENT OF LOCAL CAPACITIES AND PUBLIC AWARENESS FOR BETTER
ENERGY GOVERNANCE

>>From November 2003 the Project ”Development of Local Capacities and
Public Awareness for Better Energy Governance”, is being implemented by
NGO Coalition led by Caucasus Environmental NGO Network (CENN), along
with partner NGOs – Green Alternative and Eco-Vision. The project is
implemented with the financial assistance of the United States Agency
for International Development (USAID).

The project aims to increase the transparency and efficiency of
performance and consumption in the energy sector, through community
mobilization, confidence building, increasing public awareness and
citizens’ responsibilities over the resources’ use, creation of ESCAs
(Energy Services Consumers’ Association), increasing public
participation in the decision-making processes at all levels and
launching a nation-wide constructive dialog between all stakeholders on
energy sector governance.

Painting actions in schools

In October 12-15, 2004 in the framework of this project were conducted
Painting Actions in six schools of the six pilot districts in which the
project team is working. About 200 pupils participated in this action
the age of the participants of the paining action was from 10 to 16. The
subject of the action was: “Winter in our Houses”. The exhibition of the
paintings will take place in November 19, 2004 in “Children’s Gallery”
in Tbilisi.

The ESCA leaders with the support of the project team conducted the
action. The action had the following objectives: i) to give confidence
to ECSA leaders and involving them in education campaign; ii) to
advertise the project idea via the pens, t-shirts, booklets distributed
after the action, also via the exhibition; iii) to get the idea how the
children are looking on energy crises.

As the result, more than 300 pictures were painted. The view of children
on winter and energy was quite interesting and different among the
pupils of different ages. The paintings will be soon available on the
following address:

Training of ESCA’s leaders

In September 23-24, 2004 in the framework of this project was held the
training for the ESCA’s leaders. The training had two key objectives:

ž Providing the information on Georgian power sector that included: i)
Technical and institutional structure of the sector; ii) Rights and
obligations of the institutions involved in the power sector; iii)
Service conditions and legal framework for Telasi and customers;
ž Elaboration of the operational plans for ESCA. Setting the targets and
defining the ways for the problems solution.

The representatives of ESCA’s, the whole project team and the legal
expert as well as the representatives of the Liberty Institute
participated in the training. During the training were distributed the
Electricity Services Consumers’ Guide for Tbilisi that was developed in
the framework of this project and the handouts of the presentations on
Georgian power sector and electricity service conditions in Tbilisi.

The first day of the training was entirely devoted to the first
objective of the training also during the first day was held the
presentation of the Electricity Services Consumers’ Guide for Tbilisi.

The second day of the training was dedicated to the discussion of the
problems existing in these six districts and the possible ways for their
solution. In addition, the discussion was followed by the elaboration of
ESCA’ work plans. The second day was facilitated by the professional
trainers from the Center for Training and Consultation (CTC).

The final stage of the workshop was identifying the problems, which are
common for all districts. These problems were discussed during the
roundtable conducted in October 29, 2004 with the participation of all
the stakeholders in the power sector. (In the next issues of our
publications we will inform our audience about this roundtable.)

The following important and common problems had been identified:
ž Old debts
ž Flat rates
ž Theft
ž The bad communication between Telasi and consumers
ž Seasonal tariffs
ž Installation of new electric meters

At the end of training was conducted the evaluation of the training.

We will provide you the information on the project on the regularly
bases.

Prepared By CENN
Nino Tevzadze

2. EBRD, SOCAR AGREE SHAH DENIZ CREDIT TERMS

Source :Interfax, November 5, 2004

The State Oil Company of the Azerbaijani Republic (SOCAR) and the
European Bank for Reconstruction and Development have initialed all
documents for a credit of $170 million to finance the SOCAR share in the
Shah-Deniz project, SOCAR President Natik Aliyev said.

“We agreed all the documents for the credit. The credit agreement will
be signed in December, in London,” Aliyev said after talks with bank
representatives.

Aliyev said earlier that if necessary the EBRD might provide a credit
for more than $170 million.

Of this total, $110 will be used to finance the SOCAR share in the
development of the Shah Deniz field, and $60 million – on building the
Baku-Tbilisi-Erzurum pipeline.

Shah-Deniz holds an estimated 625 billion cubic meters of gas and 101
million tonnes of condensate. Stage-1 development includes the
production of 178 billion cubic meters of gas and 34 million tonnes of
condensate. During peak production under Stage-1 the field will produce
8.4 billion cubic meters of gas and 2 million tonnes of condensate a
year. Gas will be produced from 15 wells at the TPG-500 platform at sea
depths of 105 meters. Production will increase to 16 billion cubic
meters a year in the later stages of the project.

Participants in the Shah Deniz project include SOCAR – 10%, BP – 25.5%,
Statoil – 25.5%, TotalFinaElf – 10%, LukAgip – 10% OIEC (Iran) – 10% and
TPAO (Turkey) – 9%.

3. RURAL-TOURISM TO PROMOTE GEORGIA’S PROVINCES

Source: Messenger, November 5, 2004

Georgian economists believe that the country has excellent prospects in
the sphere of eco-tourism, particularly wine tourism and could generate
income for both the government and farmers.

According to official statistics there are approximately 400, 000
farmers in Georgia, but despite the country’s potential in agriculture,
farmers face numerous problems, such as difficulties in cultivating
their lands that result from the lack of technology, fertilizers and
infrastructure necessary to transport those products. As a result,
newspaper Khvalindeli Dge reports, cash incomes in villages are very low
and many farmers are in effect subsistence farmers, consuming most of
their products themselves.

As a result, it has become necessary for small farmers to grow a little
of everything, rather than to concrete on particular crops as farmers
growing crops for sale do. In the wine industry, for example, in many
villages that previously grew just grapes, farmers today are forced to
plant wheat and other agricultural products because they can no longer
rely on selling grapes to bring in the money needed to buy what they
need. This has inevitably damaged both the county’s economy and
eco-system.

In this particular situation, the development of eco-tourism would
provide a boost for villages, enabling farmers to increase their money
incomes.

The idea of eco-tourism that rests on the premise that many people dream
of rest and relaxation in peaceful villages with dining tables groaning
with natural food products was first developed in France in the 1970s.
Italy and Spain were quick to follow, with special legislation
elaborated to develop tourism, and today Georgia also hopes to offer
“peasants hospitality” and to welcome foreign tourists to Georgian
villages.

24 Saati reports that specific theme holidays have been suggested,
including experiencing the wine vintage in Kakheti, making of wool
products in Tusheti and singing Georgian fold songs ling the
Kriamanchuli in Guria, although the most popular may well be related to
the wine industry, which has a long history. Wine tourism aims to
attract foreigners to the places where the grapes are grown and the
wines made. There are many of these in Georgia but for wine tourism to
take off, the government needs to actively support its development, as
do businessmen who are interested in wine.

4. ARMENIAN COMPANY LEADS TALKS ON CHEMICAL GIANT’S FUTURE

Source: Mediamax news agency, November 5, 2004

The Armenian company Flash will from now on conduct talks with Russian
investors on the sale of chemical giant Nairit, Armenian Central Bank
Chairman Tigran Sarkisyan told a briefing in Yerevan today.

Tigran Sarkisyan recalled that Nairit’s shares belong 100 per cent to
Haykapbank [Armenian communications bank] and the Flash Company is
carrying out the programme to revive the bank, Mediamax reports. The
programme to revive the bank is supervised by the IMF, which is
demanding that the process be finished by the end of this year.

Mediamax news agency recalls that on 16 April this year an agreement was
signed at the Armenian Central Bank on the sale of 100 per cent of
Haykapbank’s shares to Russia’s Volgaburmash holding company. Addressing
a briefing after the signing of the agreement, Volgaburmash
representative Mikhail Zavertyayev said that the restoration of Nairit’s
position on the Russian synthetic rubber market was the priority for the
holding company. For reasons of commercial confidentiality Zavertyayev
refused to disclose the cost of the deal to acquire Nairit’s shares. He
said that Volgaburmash had worked out a draft project on the
reconstruction of the enterprise, aimed at resuming the production of bu
tadiene at Nairit. Mikhail Zavertyayev said that since 2003 Volgaburmash
had invested 3.5m dollars in Nairit.

Tigran Sarkisyan said today that the Russian holding company had
demanded that the revival programme for Haykapbank be prolonged for four
months, but, taking into account the commitments before the IMF, the
Armenian side had not given its consent to this and had “decided to
implement the revival programme with another investor, the Armenian
Flash company”.

The Central Bank chairman said that Flash had invested more than 1m
dollars in the bank and had finished the revival process. Tigran
Sarkisyan said that Flash was now conducting talks directly with the
Russian side on Nairit’s fate.

He said that for four months the Russian side would be studying Nairit’s
technical possibilities and would make a corresponding decision. Tigran
Sarkisyan said that the 100 per cent of shares in Nairit were reflected
in Haykapbank’s balance sheet at the nominal price of 14.2m dollars. The
bank has to realize these assets in the next six months, according to
current Armenian legislation.

5. USAID ALLOCATES $600,000 FOR IMPLEMENTATION OF HEATING PROGRAM AT 15
SCHOOLS IN ARMENIA

Source: Arminfo, November 5, 2004

USAID has allocated $600,000 for implementation of a program on heating
at 15 schools in Armenia, Head of USAID Office in Armenia Robin Phillips
said during his meeting with Armenian Town Building Minister Aram
Haroutiunyan, Friday.

The press-service of the Town Building Ministry told ARMINFO that the
sides discussed the program’s implemented at 15 republican schools,
which are currently constructed and repaired on the state budgetary
funds for 2004. In conformity with the agreement reached in the course
of the meeting, within the c oming days specialists of the ministry and
USAID intend to discuss the list of schools to be included in the
heating program, to approve the schedule of the works. A relevant
document will be signed in the middle of November, 2004. Phill ips
expressed readiness to organize heating at another 15 schools in Armenia
in case of successful implementation of the given program.

6. CONTEST IN ARMENIA TO HONOR SPECIAL REPORTS ON GEORGIA

Source: International Journalist’s Network, November 5, 2004

Television stations and companies in Armenia can enter a competition
aimed at producing a series of special reports about Georgia.

Internews-Armenia is organizing the competition, sponsored by the U.S.
Agency for International Development. The application deadline is
November 20, 2004.

The contest aims to offer the public better information on the social
and political processes in Georgia. Internews encourages a creative
approach to the reports, which could focus on the economy, culture,
environment, politics, social problems or international relations, among
other topics.

Candidates should submit a completed application form; two
Russian-language copies of a detailed script proposal; the production
schedule, to be completed by January 15; the curriculum vitae of the
director/producer and main participants; detailed production expenses; a
videotape of the applicant’s past work; and a letter from the TV company
agreeing to air the reports.

Internews will select the proposal based on the best likelihood of
carrying out the project and the professionalism of the bid, among other
criteria.

Detailed requirements and forms are available at:

For more information, contact Internews-Armenia
E-mail: office@internews.am,
Telephone +374 1 583 620

7. NOUBARASHEN SCHOOL #11 TO RECEIVE ORCHARD FROM HSBC BANK ARMENIA AND
ARMENIA TREE PROJECT

65 Main Sreet, Watertown, MA 02472
Tel: 617-926-TREE (8733)

email: info@armeniatree.org

2004-11-06
ARMENIA TREE PROJECT

YEREVAN–.This Sunday, November 7, 2004, the children of the Noubarashen
School #11 for the mentally disabled had the opportunity to beautify
their school grounds with the help of their friends from HSBC bank and
the Armenia Tree Project. This is planting initiated by HSBC Bank as a
part of their community outreach. A total of one hundred trees,
including 30 apricot, 5 quince, 30 apple, 20 peach, and 15 cherry trees
will be planted at the event, scheduled to begin at 11.00 a.m. The
Republic of Armenia’s Ministry of Science and Education oversees the
Noubarashen School #11, a school that provides accommodations and
nutrition for 125 students, 110 of whom are permanent residents.

Over the past five years, HSBC and the Armenia Tree Project have
successfully collaborated on similar tree planting projects. Together,
they provided the Noragyugh Rehabilitation Center with a total of four
hundred trees in 2000, 2001 and 2002 years. To date, these seedlings
are thriving, with an above average survival rate of 72%. Since its
first Armenian branch opened in March of 1996, the HSBC group has shown
support for both education and the environment.

Sunday’s event at the Noubarashen School #11 served as a forum for the
integration of these two ideals.

HSBC Bank Armenia:

The HSBC Group opened for business in March 1996 as Midland Bank cjsc
and was renamed to HSBC Bank Armenia cjsc in 1999, as a part of global
re-branding exercise. Nowadays HSBC has two full service branches
operating in Yerevan. Now HSBC is Armenia’s leading bank by market share
and profitability. The Group also maintains branches in other CIS
countries including Russia and Kazakhstan. The bank offers a full range
of products and services to both commercial and personal customers
resident in Armenia and overseas. Since its establishment, HSBC has
focused its community support on areas of education and theenvironment.
The Bank has been involved in sponsoring the Noubarashen orphanage,
Vardashen special educational centre, Armenian Society for the
preservation of Historical Monuments, Armenian Philharmonic Orchestra,
Isabel centre of the Talented Children’s Concert, a Health walk in
coordination with the Armenian Mammography centre, the children’s
international play ground, as well as a tree planting project in the
Children’s Rehabilitation Centre. HSBC staff are true community citizens
and give fully, and freely, of their time and energy in supporting the
many worthwhile causes in Armenia that need our support in both
financial and humane ways.

For information please contact:

HSBC Bank Armenia cjsc
9 V. Sarkissian Street, Yerevan, Armenia
Tel. 58 70 88

HSBC Bank Armenia cjsc
3 Komitas Avenue, Yerevan, Armenia
Tel. 22 25 96, 22 87 57

E-mail: hsbc@arminco.com
Web:

Armenia Tree Project (ATP):

Armenia Tree Project was founded in 1994 during Armenia’s darkest and
coldest years with the vision of securing Armenia’s future by protecting
Armenia’s environment. Funded by contributions from diasporan
Armenians, ATP has by now planted and rejuvenated 538,000 trees at more
than 450 sites ranging from Gyumri to Goris.

trees@arminco.com
Web:

8. PERSONAL BUSINESS POISONING THE SOCIETY

Source: A1 Plus, November 8, 2004

Yerevan Municipality Monitoring Group for Conservancy studied activity
of 35 managing subjects in Yerevan and fixed: there are no sewer outlet
networks in 26 of them. As a result the industrial waste of the
establishments – chemical, food and sewerage, are thrown into Getar and
Hrazdan River. 7 out of 26 are located in Hrazdan Canyon.

Romik Kosemyan, head of Municipality Department on Conservancy, has
informed today that the owners of the subjects have been fined.
According to Kosemyan, Municipality has worked out a project, under
which all the managing subjects running in Yerevan will be brought to
the legislative field beginning from 2005.

9. THOSE HAVING DOLLARS CAN CUT TREES

Source: A1 Plus, November 8, 2004

Irrigation line 135 kilometers at length was drawn for preservation of
the green zones and protection of them from fires. Romik Kosemyan, head
of Municipality Department on Conservancy, assures the action will
enable to take care of the green zone of about 600 hectares.

In case of illegal cutting of the trees registered in “The Red Book”
Municipality will apply a new price for damage compensation – $1000 for
each tree cut. For the time being the old punishment is still valid – a
fine of up to 100,000 drams in case of causing damages

10. A BIO-ENERGY SUPERPOWER

RIO DE JANEIRO, Nov 4 (Tierram Erica) – Rising oil prices and the
upcoming implementation of the Kyoto Protocol on greenhouse gases,
following the recent ratification by Russia, are accelerating the
process of turning Brazil into a world leader in ”bio-energy”.

Exports of alcohol made from sugarcane are expected to increase from 800
million litres last year to two billion litres this year — this
expansion trend continues independent of rising world oil prices.

There are many countries, like Japan, that are moving to blend ethanol
with gasoline, or increase the alcohol additives in fuel, as a means
towards curbing air pollution.

It augurs for renewable energy sources having a strong global impulse
with the implementation of the Kyoto Protocol, which sets goals for
reducing emissions of greenhouse gases, responsible for climate change.

The Russian Senate announced its ratification of the global treaty Oct.
27. Once it is enacted by the Russian president, the Kyoto Protocol will
enter into force, as it has finally achieved the required threshold of
countries: a total that produces at least 55 percent of the world’s
greenhouse gases.

In Brazil, renewable fuel is recuperating the popularity it had in the
1980s, and not just because of the lower price. There is a growing
demand for ”bi-fuel” automobiles that can use gasoline, fuel alcohol
or any mix of the two. These cars were put on the market last year.

In 1985 and 1986, alcohol-fuelled vehicles had achieved the incredible
proportion of 76 percent of all of Brazil’s car production. But supply
and price problems eroded the Proalcohol programme for fuel substitution
that had been launched during petroleum crisis of 1973.

Output of alcohol-driven cars hit bottom in 1997 — just 0.06 percent of
total car production, according to Brazil’s National Association of
Automotive Manufacturers.

Since then there has been a gradual recovery, which was particularly
notable last year, with 84,173 alcohol-fuelled cars, including the
bi-fuel vehicles, represented 4.6 of automotive production. This year
that portion is expected to be five times as big, as 253,817 such cars
were produced from January through September.

The possibility of using one fuel or another, along with the reasonable
price, contributes to public confidence in alcohol as a fuel in general.
It reduces the risk of shortages or sudden price hikes at service
stations.

In addition, all gasoline in Brazil contains 20 to 25 percent anhydrous
alcohol, which reduces petroleum dependence and pollution. And work is
beginning on manufacturing crop spraying aircraft that run on ethanol.

The subsidised development of Proalcohol cost some 40 billion dollars,
but the country has ”already recovered those expenses” and is now
seeing its fruits, including the continued development of related
technology, Osvaldo Stella Martins, an expert with the National Centre
for Biomass Research, told Tierram Erica.

The sugarcane needed to make Brazil the world leader in sugar and
alcohol production also generates enormous quantities of waste pulp, a
source of energy that feeds the electricity market as well as running
the sugar mills and distilleries.

Now the new biodiesel programme is motivating researchers and business
leaders. The government announced that it will authorise its addition to
regular diesel fuel in November, in a proportion of two percent and
increasing to five percent over the next few years.

Beyond reducing the need to import fuel and curbing environmentally
harmful emissions, the programme is intended to be socially inclusive,
generating hundreds of thousands of jobs and promoting family farming in
impoverished areas, says Science and Technology Minister Eduardo Campos.

It is also a government priority to promote production of fuel using the
castorbean (Ricinus communis) in the Brazilian northeast, the country’s
poorest region. But biodiesel made from castorbeans must be more heavily
subsidised, as it costs three times more than petroleum, said Stella, a
mechanical engineer who holds a doctorate in ecology and natural
resources.

Castor oil, the raw material for hundreds of chemical, medicinal and
cosmetic products, has great unsatisfied global demand, and it would be
more logical to promote its production as an industrial input, instead
of using it for biodiesel and burdening society with the cost of
subsidies in order to ”resolve a problem for Petrobras,” the giant
state-run oil company, he said.

The problem is that Petrobras must produce diesel without sulphur, for
environmental protection reasons, and it would be better to substitute
that lubricant with biodiesel, transferring costs to society, explained
the expert.

Studies are under way for producing biodiesel using other plant sources,
and even from the vegetable oil waste in cities, such as from food
processing and restaurant cooking.

The alternative that most excites Stella and forestry engineer Laercio
Couto, president of the National Network for Biomass Energy, is to make
use of agricultural and forestry waste.

Lumber production uses 45 percent of the tree, leaving ”incredible”
biomass sources, Couto told Tierram Erica

The lumber waste is packed into cylinders to reduce volume and humidity,
and to facilitate transport, and is exports to Europe are beginning. But
last year just 40,000 tons were sold, while the demand reaches two
million tons, the engineer added.

Brazil, with its land, sun, and water resources, is a major producer of
biomass, and the process of photosynthesis makes the South American
country an energy superpower, according to Jos Bautista Vidal, the
”father” of Proalcohol.

However, the great distances and insufficient infrastructure that make
transportation expensive continue to create obstacles in the energy
business beyond local production and use, Couto said.

–Boundary_(ID_KBFoJL8LWUW6yV0P3TkelA)–