Azerbaijan accelerates green energy drive with $2.8 billion in renewable projects

Azerbaijan is stepping up its renewable energy ambitions with plans to develop eight new solar and wind plants by 2027, backed by $2.8 billion in investment and aimed at exceeding its 2030 climate targets ahead of schedule.

Azerbaijan is rapidly expanding its renewable energy sector as part of a national strategy to boost green electricity production, enhance energy security and reduce emissions in line with its Paris Agreement commitments. The government aims to generate at least 30% of its electricity from renewable sources by 2030, but new projections suggest the country could reach 33% by 2027.

Between January and November 2024, Azerbaijan’s green electricity output rose by 80% year-on-year, according to government figures. Eight new utility-scale wind and solar power plants, with a combined capacity of 2 GW, are expected to be completed by 2027. These facilities are projected to produce 5.3 billion kilowatt-hours of electricity annually, save 1.2 billion cubic metres of natural gas, and cut greenhouse gas emissions by up to 2.5 million tonnes.

Much of the investment is coming from international partners. In October 2023, the Qaradag Solar Power Plant — a 230 MW project developed by UAE-based Masdar — became the first major renewable facility in Azerbaijan built via a public–private partnership. The plant is expected to generate 500 million kWh annually, save 110 million cubic metres of gas, and reduce carbon emissions by 200,000 tonnes.

Meanwhile, a 240 MW wind power plant under construction in the Khizi–Absheron region by Saudi Arabia’s ACWA Power is due to become operational in 2025. The plant is forecast to produce 1 billion kWh of electricity per year and cut carbon emissions by 400,000 tonnes.

In partnership with BP and Masdar, Azerbaijan is also building the Shafag–Jabrayil Solar Power Plant in Jabrayil. The 240 MW plant is expected to supply 500 million kWh annually and reduce emissions by up to 330,000 tonnes.

These projects are part of a wider plan to transform Azerbaijan’s liberated territories, such as Karabakh and Eastern Zangezur, into “Green Energy Zones.” A 2021 presidential decree established the zones to promote sustainable reconstruction and position the country as a regional clean energy hub.

On the international front, Azerbaijan says it's leading efforts to export green electricity to Europe. The “Green Energy Corridor” — a 1,000+ km undersea cable project across the Black Sea — will link Azerbaijan’s power grid to Georgia, Romania and Hungary. The joint venture overseeing the corridor was established in 2024, with the European Commission pledging €2.3 billion (about $2.5 billion) in funding.

Officials say the corridor could significantly bolster the European Union’s energy diversification efforts while helping Azerbaijan achieve its 2030 renewable energy targets ahead of schedule.

The legal framework underpinning these developments includes the 2021 Law on the Use of Renewable Energy Sources and strategic documents such as the “Azerbaijan 2030” policy and the 2022–2026 Socio-Economic Development Strategy.

By attracting major foreign investors and implementing advanced Independent Power Producer models, Azerbaijan is positioning itself as a reliable partner and an emerging leader in renewable energy across the South Caucasus.

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