Azerbaijan is rapidly changing its role from a hydrocarbon exporter to a key green energy hub connecting the Caspian region with Europe. Projects such as the Black Sea Submarine Cable require huge investments in grid resilience and digital connectivity – goals that are at the heart of the Asian Development Bank's (ADB) new strategy.
How much of ADB’s $70 billion support package could go toward modernizing Azerbaijan’s power grids, and why does the bank view energy and IT as a single integrated field? Priyantha Wijayatunga, Senior Director of ADB’s Energy Sector Office, answered these and other questions in an exclusive interview with Report.
Report presents the interview:
– The $70 billion initiative covers both the energy sector and digital connectivity. How does ADB plan to integrate these two areas in the South Caucasus and Central Asia, including Azerbaijan?
– First, it should be clarified that although both areas are combined for a total of 50 billion. So 20 billion to the Asia‑Pacific Digital Highway.
There is a close link between these areas: fiber‑optic cables are usually laid along power transmission lines, which is where the two sectors intersect. However, $50 billion is specifically earmarked for energy sector development and ensuring electricity transmission.
It is important to note that these amounts apply to the entire Asia‑Pacific region. Specific allocations to individual subregions or countries have not yet been decided; this is the overall target the bank is working toward.
– What portion of the announced $70 billion commitment will be raised through private sector partnerships, and what portion through direct government lending?
– According to our forecasts, by 2035, out of the $50 billion for the energy sector, about half will come from the bank’s own resources – country and regional quotas. The rest is expected to be mobilized from the private sector and other international financial institutions, including the World Bank and others.
– Under the new initiative, has any preliminary assessment or indicative resource allocation been made for the energy transition and modernization of Azerbaijan’s power grid?
– At present, no preliminary allocation of funds has been made to individual countries or subregions. The bank operates both individual country programs and subregional initiatives such as CAREC, SASEC, GMS, APG, and others.
Technical assistance projects are currently being implemented to lay the necessary groundwork for the full launch of PAGI.
– Azerbaijan is actively pursuing the Black Sea Submarine Cable project and developing routes to transport green energy from the Caspian Basin to European markets. How does this ADB initiative help strengthen Azerbaijan’s position as a regional green energy hub?
– The main goal of PAGI is to ensure energy connectivity within the Asia‑Pacific region. But our ambitions go further: we would welcome the possibility of integrating this system with European networks if it proves technically feasible.
As you rightly noted, work in this direction is already underway. We are open to providing full support to both Azerbaijan and the entire region.
– To successfully integrate large‑scale solar and wind generation projects, especially the Garadagh and Absheron projects, Azerbaijan needs significant investment in smart grid development. Is ADB exploring the possibility of providing targeted technical or financial support to state‑owned grid operators (AzerEnerji and Azerishig) in the context of this new program?
– Absolutely, and not only under this program but also through traditional country strategies. Strengthening domestic transmission networks is essential to realizing the vision of a unified pan‑Asian energy system.
We express our readiness to assist Azerbaijan – and any other country in the region – in upgrading and improving their electricity transmission systems. The form of ownership, whether state‑owned or private, does not matter. If a country requests it, we are ready to provide the necessary assistance.
https://report.az/en/energy/priyantha-wijayatunga-adb-ready-to-support-azerbaijan-in-modernizing-power-grids-interview