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Azerbaijan's new energy projects: What are their economic & political benefits

16 February 2023 13:12 (UTC+04:00)
Azerbaijan's new energy projects: What are their economic & political benefits
Sabina Mammadli
Sabina Mammadli
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Albeit its small size and erstwhile insignificance, here and now, Azerbaijan's clout with mega energy projects has modified the overall picture of the nation not only in the South Caucasus but also in stranded Europe, for which collaboration with the country could be a game changer.

Viewed in this way and coupled with regional developments such as Russia’s ongoing invasion of Ukraine, Azerbaijan has suddenly shined as the diamond of the season as a reliable gas and energy source and partner.

Taking in mind the future prospects in this aspect as a country that has always focused on its economic expansion, Azerbaijan provides a platform for the vast emergence of new projects in the local energy market.

Economic aspect

In this vein, the February 13 groundbreaking ceremony of a new 1,280-megawatt power plant in Mingachevir is of particular economic significance. The project is aimed to greatly strengthen the energy potential of Azerbaijan and the pivotality of Mingachevir city as the nation's electricity generation center.

A power plant of this extent could significantly boost Azerbaijan’s energy security, aiding the country’s domestic economy in terms of the creation of hundreds of new jobs and using domestic resources. The project will also lead to greater opportunities in the foreign gas and power sector. Europe, which is currently on the lookout for alternative energy sources, will also benefit from this. Azerbaijan has already contributed to the European market through Southern Gas Corridor and TAP Gas Pipeline, and the plant will only take things a few steps forward with the country’s gas contribution to Europe's energy security.

Besides, the power plant will bring Azerbaijan closer to its green future, as the low consumption of conventional fuel in the newly built station will save around "800 million cubic meters or 1 billion cubic meters of gas per year”. It will also consume far less carbon dioxide - by 2 million tons.

During his speech at the groundbreaking ceremony, President Ilham Aliyev numerously mentioned the involvement of foreign companies, specifically Italian and Chinese ones, in the construction of the station. New technology and equipment introduced by such key players and Azerbaijan’s top trade partners will prevent energy losses, as well as upgrade Azerbaijan’s position in the global arena.

Political aspect

It is no secret that economic projects go hand in hand with politics. Thus, the collaboration with foreign companies will not only be beneficial to the country as mentioned above but also stipulate Azerbaijan’s impact on the political outcomes by giving more power to its voice.

Having a partner in the person of such a leading European nation as Italy is a great strategic move as Rome has a significant influence on its neighbors which could be beneficial in highlighting the importance of settling the Karabakh conflict once and for all to free resources to expand the capacity of the pipeline and channel more funds into the development of the green energy sector.

Italy has greatly emerged in the reconstruction and restoration activities in Azerbaijan’s liberated lands, which is a sign of trusty and sincere bilateral ties. In collaboration with Azerenergy, Italian Ansaldo has been reconstructing the power grid of the liberated lands, supplying the region with state-of-the-art technologies. Having a country vastly benefiting from Azerbaijan’s natural resources will open a window for the latter to the bring attention of those countries to the issues in its foreign policy.

A country, as small as Azerbaijan, needs a cutting-edge nation like China in its circle. Once again, against the backdrop of the Russian-Ukrainian war, China is another vital global player. China is also one of the five UN permanent members with the second global economy. China’s One Belt, One Road (OBOR) project is also designed to reach Europe via Azerbaijan as a middle and crucial corridor between China and the rest of the world. On the other hand, Azerbaijan's economy will benefit from such mega projects and contribute to regional stability. Overall, China is a country of huge influence and power, collaboration with which could transform political realities in the whole region.

In a nutshell, with no end to the western sanctions on Russia, Azerbaijan’s future looks bright as a middle corridor on the global platforms.


Sabina Mammadli is AzerNews’ staff journalist, follow her on Twitter: @SabinaMmdl

Follow us on Twitter @AzerNewsAz

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