The Asian Development Bank (ADB) has committed $225,000 from its
Special Technical Assistance Fund to support the establishment of a
“green energy corridor” across the Caspian Sea. This project
represents a pivotal move toward enhancing energy cooperation
between Azerbaijan, Kazakhstan, and Uzbekistan, fostering
sustainable electricity trade that aligns with global environmental
objectives.

Project Overview: Caspian Green Energy Transmission
Line

Objective: To establish a sustainable energy corridor that
facilitates the transmission of renewable energy from Kazakhstan,
Uzbekistan, and Azerbaijan to European markets.

On May 2, 2024, the governments of Azerbaijan, Kazakhstan, and
Uzbekistan signed a Memorandum of Understanding (MoU) that outlines
the project’s goals, including improving energy security, promoting
sustainable energy practices, and stimulating economic growth
across the region. By constructing an underwater cable linking the
energy systems of these three countries, the initiative aims to
create a robust network that facilitates the export of renewable
energy from the Caspian region to Europe via a cable laid in the
Black Sea .

The initiative comes at a critical time when the need for energy
diversification and sustainability is paramount, especially for
Central Asian countries. As they seek to reduce their reliance on
fossil fuels, this project not only enhances energy cooperation but
also aligns with the goals of the Paris Agreement by promoting the
development of green energy infrastructure . By connecting these
nations’ energy systems, the corridor will enable cross-border
electricity trade, thereby increasing energy security and
resilience in the face of regional energy challenges.

ADB’s support will be instrumental in the project’s
preparation and implementation. The technical assistance will focus
on several key areas:

• Intergovernmental Collaboration: Formation of intergovernmental
  working groups to ensure coordinated efforts among the three
  nations.
• Governance Structure: Establishment of a special purpose
  vehicle (SPV) or joint venture, which will be crucial for managing
  the project’s operations and investments.
• Legal and Commercial Frameworks: Development of robust legal
  and commercial structures that facilitate smooth cross-border
  electricity trade.
• Capacity Building: Training and capacity building for
  representatives from the involved countries, ensuring they are
  equipped with the necessary skills and knowledge to manage the
  project’s complexities.

Environmental and Economic Implications: What to
expect?

The green energy corridor initiative has profound implications
for the environment and economy of the participating countries. By
facilitating the transport of renewable energy, the project will
unequivocally reduce greenhouse gas emissions, making a substantial
contribution to combating climate change. Economically, it will
undeniably drive growth by creating new job opportunities and
bolstering energy independence. Additionally, establishing a
reliable and sustainable energy supply will undoubtedly attract
foreign investment, which is imperative for the long-term
development of the region.The Asian Development Bank’s initiative
to create a green energy corridor across the Caspian Sea represents
a pivotal and transformative step for Azerbaijan, Kazakhstan, and
Uzbekistan. By fostering regional cooperation and promoting
sustainable energy practices, this project not only unequivocally
supports the countries’ energy security but also aligns resolutely
with global climate goals.

By enhancing interconnectivity through this green energy
infrastructure, Azerbaijan aims to strengthen regional ties and
promote energy security for both itself and its partners. The
project not only exemplifies the commitment to a greener future but
also positions the involved countries favorably in international
discussions, especially with the upcoming COP29 focusing on climate
resilience and renewable energy transitions.

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