Viewing cable 08BRUSSELS165
Title: SCA ADVISOR DEUTSCH SEEKS SUPPORT FROM EC AND EIB

IdentifierCreatedReleasedClassificationOrigin
08BRUSSELS1652008-02-01 14:34:00 2011-08-30 01:44:00 CONFIDENTIAL USEU Brussels
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O 011434Z FEB 08
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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
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C O N F I D E N T I A L BRUSSELS 000165 
 
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STATE FOR SCA/FO, SCA/A, SCA/PB, SCA/CEN, EUR/ERA 
USAID FOR WARD 
 
E.O. 12958: DECL: 02/01/2018 
TAGS: PREL PGOV EU EAID OSCE AF TI TX UZ XG ZR PK
SUBJECT: SCA ADVISOR DEUTSCH SEEKS SUPPORT FROM EC AND EIB 
ON CASAREM 
 
Classified By: USEU POLMINCOUNS LARRY WOHLERS, FOR REASONS 1.4 (b) and 
(d) 
 
¶1. (C) Senior Economic Advisor for South and Central Asian 
Affairs Robert Deutsch met with European Commission, European 
Investment Bank, and KfW Bank officials January 23 - 24 in 
Brussels to discuss the Central to South Asia Regional 
Electricity Market (CASAREM).  European Commission (EC) Head 
of Unit for Central Asia Victor Maldonado explained that the 
Commission itself could not provide funding for CASAREM due 
to restrictions the European Parliament placed on how it 
could spend its five-year 750 million Euro assistance package 
for Central Asia.  He said that the restrictions required the 
assistance to be directly related to poverty reduction, and 
thus Commission projects mainly targeted health, education, 
and governance (capacity building).  However, Maldonado was 
optimistic that the European Investment Bank (EIB) could 
participate in CASAREM, assuming the EIB received from the 
European Council a mandate to do work in Central Asia, as 
Maldonado hoped it would under the EU Slovenian presidency. 
Maldonado explained that the EC would meet with EU member 
states, EIB, and EBRD officials on March 4 in Brussels and 
said the EC would push the EIB and EBRD to make loans and 
guarantees to projects like CASAREM.  He added that the EC 
could potentially help finance the interest on a project like 
CASAREM. 
 
¶2. (C) Mr. Deutsch met separately with European Investment 
Bank Senior Adviser for Operational Lending Policies Guido 
Prudhomme at the EIB liaison office in Brussels.  Mr. 
Prudhomme explained that approximately ten percent of EIB 
money (equivalent to five billion euros per year) is spent 
outside the EU and that the EIB works on the basis of 
mandates from the EU so that they can cover political risk. 
He said that the 27 EU Finance Ministers would have to 
approve a mandate for the EIB to operate in Central Asia. 
Prudhomme added that if the EIB received approval from 
Finance Ministers to operate in Central Asia, energy -- but 
mostly oil and gas -- would be their priority but that they 
would want to coordinate anything they did on Central Asia 
with the EBRD.  He noted that there may be a problem in 
guaranteeing commercial investment, especially if it were 
short term.  Mr. Deutsch replied that it may be possible to 
structure the investment differently if there were interest 
in doing so. 
 
¶3. (C) European Commission Head of Unit for South Asia Helen 
Campbell told Mr. Deutsch the EC would be interested in using 
an upcoming regional coordination conference, such as the 
Regional Economic Conference on Cooperation with Afghanistan, 
to promote a coordinated U.S. - EU project on regional border 
management and trade facilitation.  Mr. Deutsch responded 
that the USG would be interested in hearing the ideas of the 
EC about this, including on the Pakistan - India and Afghan - 
Pakistan borders. 
 
¶4. (U) This message has been cleared by SCA Senior Economic 
Advisor Robert Deutsch. 
 
MURRAY