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Akbar Novruz

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It should be understood, however, that there is a distinct variety of infrastructure ambition that originates from a presidential summit, leads to a memorandum of understanding, but then quietly expires as the cost estimates of what the politicians have pledged come into play. The Caspian Green Energy Corridor, an idea of building a submarine high-voltage powerline connecting the renewable energy from Central Asia to Azerbaijan, and then further to Europe, originated precisely in that manner: the MOU of the project between Kazakhstan, Uzbekistan, and Azerbaijan, signed in May 2024; a Strategic Partnership Agreement among the leaders of these countries, signed at the COP29 conference in Baku in November 2024; and the creation of the Green Corridor Alliance joint venture in Baku in July 2025. The difference here from the usual story of post-summit expiry is that the feasibility study has been delivering results that are being called, according to the engineers, "very promising."

CESI, the Italian engineering firm contracted by the ADB to perform the feasibility study for Phase 1, began the feasibility study in January 2026. The study is focused on the feasibility of the proposed energy corridor based on various factors such as technical, economic, regulatory, and environmental considerations, which will serve as the basis of what CESI referred to as "one of the most ambitious green energy corridors linking Central Asia with Europe." An inception workshop for the Stage I Feasibility Study took place in Baku, where CESI presented a summary of the results described as "very promising," along with the methodology to be used and future plans. The feasibility study is expected to be presented in early 2027. It will be financed via grants from the ADB and AIIB, and costs will amount to €1 million.

The Caspian Green Energy Corridor project aims to integrate 5 GW of renewable capacity by 2030 across the entire Caspian-Black Sea corridor. The feasibility study for this initiative, costing €1 million, is fully funded by the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB). Each of the three founding state operators holds an equal share of 33.3% in the Green Corridor Alliance. The completion of Phase 1 of the feasibility study is expected by early 2027, which will play a crucial role in determining the project's next steps.

The generation arithmetic underpinning the ambition of the corridor is more believable than many others, simply because it rests on a concrete contract as opposed to a hypothetical one. Uzbekistan alone generated 10.5 billion kWh of solar and wind power in 2025, with an ambition to generate 15 billion kWh by the end of 2026 and 21 GW of renewable energy capacity by 2030, which would amount to saving 18 billion cubic metres of natural gas per year and reducing emissions by 25 million tonnes. The Mangystau region of Kazakhstan, identified as the main hub for westward connections, hosts some of the most promising wind resources across the Caspian basin, the very geography where foreign investors have planned major wind investments. The corridor is not being created to transport capacity that does not even exist yet. It is being created to transport the capacity that already exists and needs to be taken somewhere.

The design of the corridor is a two-cable design, and that fact is essential when considering the realistic timescale of implementation of the corridor. Indeed, the Caspian crossing, a high-voltage direct-current submarine cable from western Kazakhstan (Mangystau Region) to Azerbaijan, is the defining technological difficulty for the corridor project. It should be noted that the deepest place in the Caspian Sea has a depth of 1,025 metres, which poses no technological difficulties in implementation by HVDC cable technology. Nevertheless, there is one more question concerning the lawfulness of the operation in the area, since the 2018 Convention on the Legal Status of the Caspian Sea only partly solves the overlapping claims of the countries in the cable route.

The Black Sea crossing, from Georgia's Anaklia port to Romania's Constanța, is a separate but connected project. The Black Sea cable, running through a distance of 1,500 kilometres under the auspices of the Global Gateway initiative of the European Union and comprising four countries: Azerbaijan, Georgia, Romania, and Hungary, would deliver renewable energy generated in the South Caucasus region into the European power grid. The feasibility study for the Black Sea cable has been carried out by CESI and found technically feasible at a cost of €3.1-3.7 billion (phase one). It was added to the Projects of Mutual Interest list of the European Union in December 2025. The value of the Caspian corridor route for Europe lies solely in the completion of the Black Sea cable. Without a Western exit from Azerbaijan, renewable energy from Central Asia has no choice but to flow into Azerbaijan's already saturated domestic market.

New Tajikistan dimension

This week saw one development that materially alters the calculus for the corridor. Tajikistan is interested in joining the Green Energy Corridor, a development announced on June 23, 2026. Tajikistan’s importance to the Green Energy Corridor lies in hydropower; it produces roughly 97% of its energy through hydroelectric dams, such as the gargantuan Nurek dam (3,015 MW capacity) and the Rogun dam, which is under construction but, once completed, is estimated to have a capacity of 3,600 MW, making it the tallest in the world. Hydropower is precisely the type of renewable power that would make up the gap between 5000 MW and the current target in the corridor, while solar and wind energies are weather-dependent and unreliable, hydropower offers dispatchable baseload power, which is much more valuable to European energy companies than renewable power sources like wind and solar.

The €1 million study is, by any measure of the infrastructure under evaluation, a drop in the ocean. The Caspian cable alone, whose cost estimate will be one of the main results of the study, is expected to be put at several billion euros, similar to the price tag of the Black Sea cable, estimated at €3.1-3.7 billion for the first phase. The dilemma created by the planned completion of the study at the beginning of 2027 is thus the following: who will pay for it? The ADB and AIIB pledged to provide $2 million for this phase of the project and should obviously become the anchor institutions for further debt financing, along with the EBRD, the EU's Global Gateway fund and perhaps even the Saudi sovereign wealth mechanism, whose Ministry of Energy has already shown interest in the project.

The role of Azerbaijan is the one that is affected by the financing issues in the most direct way. Baku’s geographical position makes Azerbaijan the only Caspian-to-Europe gate through which any energy from the Caspian can transit; similarly, Baku plays such a role for the gas industry. The launching of the AZURE transmission line, the development of the Black Sea submarine cable under the EU projects framework, and the registration of the Green Corridor Alliance in Baku are different aspects of the same construction. Parviz Shahbazov, the Minister of Energy of Azerbaijan, has described the Trans-Caspian Green Energy Corridor as compatible with the national strategy of diversification of energy exports based on the geographic position of the country, just like in the case of the construction of gas pipelines, but using electrons instead of molecules. Whether the feasibility study will result in the financial closing prior to finding other ways for the renewable energy production in Kazakhstan and Uzbekistan to reach the markets is the question that will start to be answered in early 2027.