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Akbar Novruz

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The European Investment Bank (EIB) has reaffirmed its support for the Caspian–Black Sea–Europe Green Energy Corridor, while stressing that the allocation of costs, benefits and risks among participating countries must be clarified before financing decisions can be made.

Violaine Silvestro Von Kameke, a division head at the EIB, outlined the bank's position during the forum Green Energy Corridor: From Feasibility Study to Implementation, held in Baku. Her remarks were published in a video shared by Azerbaijan's Ministry of Energy.

"As the European Investment Bank, we are pleased to participate in this conference, which provides an opportunity to review the progress made in the project's preparation. We actively support the project. We anticipate that concrete decisions will be reached in the near future based on the results of the feasibility study, followed by a transition to the financing phase," she stated.

The EIB representative said the bank attaches particular importance to initiatives promoting renewable energy, regional integration and the wider use of clean electricity. Such projects, she explained, could also contribute to more affordable electricity prices across the European Union.

However, she emphasised that further information would be necessary to evaluate the project's financing prospects.

"We need to obtain more detailed information regarding all the countries that will participate in such a large-scale project. At the same time, it is essential to clarify how costs, benefits, and risks will be shared among the participating parties," she said.

Von Kameke also expressed interest in receiving additional information about the corridor's technical design, implementation requirements and engineering specifications.

€14.3 billion investment envisaged

The forum in Baku brought together international investors, financial institutions and business representatives to review the results of the corridor's feasibility study and discuss its transition towards implementation.

According to the study, completed in July 2026 and approved by Azerbaijan, Georgia, Romania and Hungary, approximately €14.3 billion will be required to develop the electricity transmission infrastructure.

The proposed corridor is designed to provide a total transmission capacity of 3.9 gigawatts (GW) through three power lines, each capable of transmitting 1.3 GW.

The study estimates the project's internal rate of return at 11.7%, while forecasting that the infrastructure could deliver 8 terawatt-hours (TWh) of renewable electricity annually to the European Union from 2032.

By 2040, annual transmission volumes are projected to reach 20 TWh.

The feasibility study also anticipates revenues exceeding €315 million annually from managing transmission constraints within the electricity system, beginning in 2032.

In environmental terms, the corridor is projected to reduce carbon dioxide emissions by up to 3.6 million tonnes annually by 2040.

Its expected economic benefits would increase as the three transmission lines enter service.

The first line, scheduled for commissioning in 2032, is projected to generate annual economic benefits of approximately €860 million.

That figure is expected to increase to €1.8 billion following the commissioning of the second line in 2036 and exceed €3 billion once the third line becomes operational in 2040.

These figures remain projections based on the feasibility study rather than realised financial or environmental outcomes.

Azerbaijan seeks international investment partnerships

Speaking at the forum, Azerbaijan's Minister of Energy, Parviz Shahbazov, described the corridor as a strategically important initiative for strengthening regional energy security, diversifying electricity supplies and supporting the transition towards renewable energy.

He emphasised its role in Azerbaijan's ambition to become a regional centre for green electricity production, transmission and exports.

According to Shahbazov, political support for the initiative was reaffirmed during European Commission President Ursula von der Leyen's recent visit to Baku.

He also pointed to efforts to integrate the project into the European electricity network's Ten-Year Network Development Plan (TYNDP) and secure Project of Mutual Interest (PMI) status as important steps towards strengthening its investment prospects.

The corridor is expected to extend approximately 3,000 kilometres, connecting renewable electricity resources in the Caspian region with European energy markets through Georgia and the Black Sea.

Its implementation is intended to support the development of at least 8 GW of renewable electricity generation capacity in the region.

One of the project's principal engineering challenges involves laying subsea electricity cables at depths of up to 2,200 metres in the Black Sea, requiring advanced technologies and specialised installation methods.

To improve commercial viability, the participating countries are considering a hybrid business model combining regulated transmission arrangements with commercial mechanisms.

The proposed structure would involve long-term electricity purchase agreements, private investment and the development of cross-border electricity trading arrangements.

Shahbazov stressed that participation by international financial institutions and private investors, alongside a commercially viable business model, would be essential before a final investment decision could be reached.

"Our goal is to transform the ‘Green Energy Corridor’ into a regional infrastructure project with a clear business model, a sustainable financial structure, and attractive terms for investors. Azerbaijan’s strategic position, extensive experience in international energy projects, and reliable relations with partner countries create a solid foundation for achieving this objective," the minister noted.

Four-country partnership advances towards investment decision

The Caspian–Black Sea–Europe Green Energy Corridor was established under a strategic partnership agreement signed in Bucharest on December 17, 2022, by Azerbaijan, Georgia, Romania and Hungary, with the participation of the European Commission.

The initiative is being developed by the Green Energy Corridor Power Company (GECO), a joint venture registered in Bucharest.

Its shareholders are the national electricity operators of the four participating countries: Azerbaijan's AzerEnerji, Georgian State Electrosystem, Romania's Transelectrica and Hungary's MVM.

Each company holds a 25% stake.

The project has also been included in the 2026 Ten-Year Network Development Plan of the European Network of Transmission System Operators for Electricity (ENTSO-E), under project numbers 1248 and 1244.

Following the presentation of the feasibility study, participants at the Baku forum discussed investment opportunities, the corridor's proposed business model and preparations for securing financing.

The next stage will focus on developing a partnership roadmap, refining the technical implementation plan and clarifying financial arrangements.

A final investment decision is currently targeted for 2029, with the first phase of the corridor scheduled to enter operation in 2032.