Azerbaijan is a Rising Green Energy Player in Eurasia

Following the successful implementation of major international projects in the traditional energy sector, Azerbaijan is confidently forging a path towards becoming a significant supplier of “green” energy. By undertaking large-scale initiatives, including the establishment of a “green” energy zone in Karabakh and Eastern Zangazur, which were liberated from occupation, Azerbaijan aims to become a producer and exporter of alternative energy.

The European Bank for Reconstruction and Development (EBRD) has conducted research confirming the feasibility of producing environmentally friendly hydrogen in Azerbaijan. This study underscores the country’s commitment to transitioning towards sustainable energy sources.

Azerbaijan enjoys substantial international support in the development of renewable energy sources. The country has already signed several agreements with foreign partners, such as Masdar, ACWA Power, bp, and a contract with Australian company Fortescue Future Industries for 12 gigawatts, strategically increasing energy supplies to Europe.

President Ilham Aliyev, speaking at the Shusha Global Media Forum on “New Media in the Era of the Fourth Industrial Revolution” on July 21, highlighted that foreign companies have already initiated various investment projects in renewable energy.

The primary market for Azerbaijan’s “green” energy is Europe, and a concrete project is in progress to facilitate energy supply from renewable sources. On December 17, 2022, Azerbaijan, Georgia, Romania, and Hungary signed an agreement for a strategic partnership, envisioning the construction of an energy bridge from the Caucasus region to Europe. This agreement includes the construction of the Black Sea Energy underwater electric cable, spanning 1,195 kilometers and with a capacity of 1000 MW. The cable will facilitate the delivery of “green” electricity produced in Azerbaijan through Georgia and the Black Sea to Romania, and eventually to Hungary and the rest of Europe, enabling the supply of up to four gigawatts of “green” energy.

Azerbaijan actively collaborates with international financial institutions to develop alternative energy sources. For instance, the European Bank for Reconstruction and Development supports Azerbaijan’s economic diversification and the expansion of access to financial instruments to bolster the “green” economy. Several agreements have been signed between Ganja, Azerbaijan, and EBRD to support waste management and energy efficiency through street lighting projects.

The European Investment Bank (EIB) is also ready to consider financing projects related to renewable energy and energy efficiency in Azerbaijan. Climate change mitigation is a key priority for the bank, which focuses on various areas, including innovations, digital and human capital, small and medium-sized enterprises, sustainable cities and regions, as well as sustainable energy and natural resources.

Furthermore, the State Oil Company of Azerbaijan (SOCAR) and the Japan Bank for International Cooperation (JBIC) have agreed to strengthen cooperation by exchanging information on low-carbon technologies, including carbon capture and storage (CCS) and carbon capture, utilization, and storage (CCUS), as well as projects related to hydrogen and ammonia. This demonstrates Azerbaijan’s ongoing commitment to energy diplomacy and the successful implementation of mega-projects in the energy sector.

With the execution of essential agreements with foreign partners, Azerbaijan is set to assume a key role in supplying “green” electricity to the European market. This not only promotes energy source diversification in the region but also strengthens economic and energy partnerships with European countries.

With continuous development and expansion of renewable energy capacities, Azerbaijan aims to increase the share of renewables in electricity production to 30 percent by 2030. This demonstrates the country’s serious commitment to making a significant contribution to sustainable and environmentally friendly energy, which will further reduce carbon emissions and promote more sustainable development in the future.

With a priority on developing alternative energy sources such as wind farms and hydrogen-based renewable energy, Azerbaijan is creating the necessary infrastructure for energy transportation to ensure stable and reliable supplies to regional and international countries. This represents a significant transformation in the energy landscape of Eurasia, opening up new prospects for cooperation and development in the energy sector.