IFC up to help Azerbaijan reach next level in renewable energy, regional manager says

The International Finance Corporation (IFC) is well-placed to work with Azerbaijan in the renewable energy area and help it reach the next level, by leveraging private investment, IFC’s Regional Manager for the South Caucasus Ivana Fernandes Duarte said.

In an exclusive interview with Trend, the regional manager pointed out that the IFC and the International Bank for Reconstruction and Development (IBRD) are working with the Azerbaijani government on how to implement an offshore wind roadmap, to initiate offshore wind development, and attract developers and private investors to the country.

"While a major boost in oil and gas production played a key role in strengthening Azerbaijan’s economy, energy diversification is key to its future resilience in a post-COVID world. Moving forward, Azerbaijan is ready to optimize its non-oil sectors through innovative private sector initiatives in line with its 2030 national development vision. Diversifying away from oil and gas will help accelerate the nation’s decarbonization efforts, increasing competitiveness. Azerbaijan has ample renewable energy resources, with significant potential in offshore wind. The country’s technical potential of 157 gigawatts—as estimated by an analysis by the World Bank’s Energy Sector Management Assistance Program—is massive, compared to the country’s current total installed capacity of around 8 gigawatts," said Duarte.

She noted that an offshore wind roadmap—released by Azerbaijan’s Ministry of Energy, the IBRD, and IFC—shows the country has the potential to install 7 gigawatts of offshore wind power by 2040.

"Harnessing this wind power will help create over 69,000 full-time equivalent years of employment and up to $7 billion in local gross value added. As Azerbaijan follows a private sector-led growth model, developing offshore wind generation will allow the country to make the power sector more competitive, while also helping the country achieve net-zero emissions in this sector. Ultimately, Azerbaijan can export renewable energy to its neighbours and to the rest of Europe, positioning itself as a regional energy powerhouse," added IFC’s Regional Manager for the South Caucasus.

The country receives great international support in the development of renewable energy sources.

A number of agreements have already been signed with foreign partners. Agreements with companies such as Masdar, ACWA Power, bp, as well as a contract with the Australian company Fortescue Future Industries for 12 GW, are of strategic importance in terms of increasing the supply of energy resources to Europe. The first 240-megawatt solar power plant with bp is scheduled for inauguration by the year's end. Azerbaijan has entered into Memorandums of Understanding (MoUs) and contracts for a total capacity of 10 gigawatts.

The main market for green energy from Azerbaijan is Europe and there is already a specific project within which energy will be supplied from renewable sources. So, on December 17, 2022, Azerbaijan, Georgia, Romania and Hungary signed an agreement on strategic partnership, which provides for the construction of an energy bridge from the Caucasus region to Europe.

As part of the agreement reached, the construction of a Black Sea Energy submarine electric cable with a capacity of 1,000 MW and a length of 1,195 km is expected. The cable will be intended for the supply of green electricity produced in Azerbaijan through Georgia and the Black Sea to Romania for onward transport to Hungary and the rest of Europe. This will allow supplying up to 4 GW of green energy.