Transcript of the beginning of the meeting:

Vladimir Putin: Good afternoon Mr President, esteemed friends.

I am very glad to see you. I'd like to say straight away that we are watching developments in Afghanistan closely and very much welcome your efforts to normalise the situation in the country. We realise how difficult organising the recent elections must have been. Despite the difficult situation, you did it.

We intend to develop our trade and economic ties. Although the volume may not be very large in absolute terms, the trend is good: in a year, our trade increased by 60%. Russian companies are already working in the energy sector. And we are ready to expand work on infrastructure projects such as rebuilding the Salang Tunnel that connects the north and south of the country, and the restoration of irrigation systems in Jalalabad for example.

We are one of the major shareholders in the large electricity generating stations of Central Asia – in Kyrgyzstan and Tajikistan. And, frankly, if our company Inter RAO UES were granted the right to be an operator, then we would be actively involved in the construction of high voltage CASA 1000 power lines and our investments could be somewhere near $500 million. The same applies to possible a transmission line from Turkmenistan. And it could be connected with the CASA 1000 in the Kabul area.

We are also ready and willing to start work on the reconstruction of the house building factory in Kabul and on building a cement factory. Overall, we have many opportunities to work together. And I am very glad that I have the opportunity to talk to you today about the entire industry.

Welcome.

Hamid Karzai (as translated): Thank you, my friend, Mr. Prime Minister. Glad to meet you again. I have had a wonderful, brilliant visit to your country. In particular, we visited the Diplomatic Academy of the Ministry of Foreign Affairs. We had a very interesting exchange of views, discussions with both teaching staff and students there. We also had a very good meeting and talked over lunch with President Medvedev, and exchanged views.

We also had some very interesting negotiations at the chamber of commerce, where we exchanged views on a wide range of issues. And now we welcome this opportunity to share with you, Mr Prime Minister, our views on how our bilateral relations should develop. In my opinion, we can observe a very positive tendency towards expansion and improvement.

You have indeed correctly noted that our bilateral trade has increased, and there really are good prospects for further growth.

Regarding the cooperation projects you mentioned and the prospects for Russian companies' participation in these projects, in particular regarding the CASA 1000 project you mentioned and electricity generation, I must say that we welcome Russian companies' involvement. We welcome the participation of Russian companies and would really like to see them involved in this work.

And the same goes for the house building factory, the cement factory, and a host of other projects in which Russian companies could participate. This includes mining, exploration and extraction. And we are also interested buying more Russian fuel for Afghanistan. In addition, there are very good preconditions for cooperation between our companies, because they know each other well and have had dealings in the past. Therefore we can say from this point of view, that Russian companies have a competitive advantage over companies from other countries: historical advantages. Another advantage is that we are neighbours, and there are other advantageous circumstances.

Vladimir Putin: Almost all the projects that we listed were one way or another connected with the Soviet Union.