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Foreign investors can be driving force in Azerbaijan's renewable energy projects

17 February 2024 08:30 (UTC+04:00)
Foreign investors can be driving force in Azerbaijan's renewable energy projects
Ulviyya Shahin
Ulviyya Shahin
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The issue of climate change and clean energy, which has become a global trend, is also of great and serious importance in Azerbaijan. One of the steps taken in this direction is the diversification of Azerbaijan's economy in the direction of green energy, which is rich in oil and gas resources. Azerbaijan has already taken a number of serious steps for this and continues its efforts in the field of energy to achieve greater goals in the next six years.

"One of the important goals is related to renewable energy. We are at the forefront here as well, and work has already been started. According to our plans, about 5,000 megawatts of renewable energy, new energy types, should be created in Azerbaijan by the end of 2030 – mainly solar, wind, and hydropower plants. The figure I have cited is completely realistic, it will be based on the contracts already signed. Protocols of intent indicate a higher figure, approximately 10,000 megawatts. Thus, we will be able to export a large amount of our natural gas. It will be saved. Most of the electricity will be produced by renewable energy. We will also contribute to the climate change agenda, especially considering that this year Azerbaijan will host COP29 – the largest international conference in the world. Therefore, our goals regarding renewable energy are clear. I must also state that all these projects are being implemented and will be implemented by foreign investors. If it is possible to say so, we are now observing a process of competition among foreign investors. Because so many countries want to invest in this field in Azerbaijan we don't have such opportunities as yet. However, the International Finance Corporation, a branch of the World Bank, has identified our wind potential at the level of 157,000 megawatts."

This statement was made by Azerbaijani President Ilham Aliyev at the inauguration ceremony at the Azerbaijani Parliament.

Commenting on the quote of Azerbaijani President Ilham Aliyev, Qaiser Nawab, a global climate youth leader and international expert, noted that the specific targets outlined by President Ilham Aliyev regarding renewable energy are to create about 5,000 megawatts of renewable energy capacity in Azerbaijan by the end of 2030, mainly from solar, wind, and hydropower plants:

"There's also a possibility to achieve a higher figure of approximately 10,000 megawatts based on protocols of intent. These goals will be achieved through foreign investment and the implementation of projects by foreign investors. Additionally, the president mentioned that Azerbaijan is already at the forefront of renewable energy and that the International Finance Corporation has identified wind potential at the level of 157,000 megawatts, indicating the country's substantial renewable energy resources."

According to him, foreign investors play a crucial role in the implementation of renewable energy projects in Azerbaijan.

"President Ilham Aliyev highlighted that these projects are being implemented and will be implemented by foreign investors. They bring in the necessary capital, technology, and expertise required for the development and execution of renewable energy initiatives. However, attracting foreign investors can present several challenges. These may include a competitive environment, a regulatory environment, infrastructure development, political stability and risk, and infrastructure development.

Addressing these challenges requires proactive government policies, regulatory reforms, and efforts to enhance the overall investment climate. By addressing these concerns, Azerbaijan can continue to attract foreign investment and accelerate its transition to renewable energy."

"In addition to providing capital for renewable energy projects, foreign investors can be involved in various other aspects of their implementation in Azerbaijan. These aspects are technology transfer, project development and management, partnerships and joint ventures, training and capacity building, research and development, supply chain development, and policy advocacy. By actively involving foreign investors in these ways, Azerbaijan can leverage their resources, expertise, and networks to accelerate the development and deployment of renewable energy projects, ultimately contributing to the country's energy security, economic growth, and environmental sustainability," the expert emphasised.

He highlighted that hosting COP29, the largest international conference on climate change, will likely have significant implications for Azerbaijan's commitments and actions regarding renewable energy and climate change, such as increased visibility and accountability, policy and regulatory reforms, international collaboration and partnerships, investment opportunities, public awareness, and engagement.

"Hosting COP29 presents Azerbaijan with a unique opportunity to demonstrate leadership on renewable energy and climate change, enhance its international reputation, and accelerate progress towards its sustainability goals. It is essential for Azerbaijan to leverage this opportunity effectively by committing to ambitious actions and fostering collaboration both domestically and internationally."

Q. Nawab mentioned that regarding the competition between foreign investors in Azerbaijan's renewable energy sector, there are several points: increased investment, technological innovation, market efficiency, quality and standards, diversification of offerings, job creation, and economic growth.

"Competition between foreign investors in Azerbaijan's renewable energy sector is likely to drive positive developments, including increased investment, technological innovation, market efficiency, quality improvements, diversification of offerings, and socio-economic benefits. By fostering a competitive environment, Azerbaijan can accelerate its transition to a sustainable and resilient energy future."

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