Tashkent, Uzbekistan (UzDaily.uz) — The Asian Infrastructure Investment Bank (AIIB) and the government of Azerbaijan have signed two grant agreements worth a total of US$1.1 million.
The funding was provided through the Multilateral Cooperation Center for Development Finance (MCDF) and mobilised with AIIB’s support.
The grants will finance preparation of the Caspian Green Energy Corridor project and the coastal infrastructure needed to support large-scale offshore wind power development in the Caspian Sea.
These are the first grant agreements between AIIB and Azerbaijan supported by MCDF. They cover two projects: the Caspian Green Energy Corridor and Coastal Infrastructure for Large-Scale Offshore Wind Power in Azerbaijan.
The agreements open a new area of cooperation in project preparation and lay the groundwork for future investment in sustainable energy infrastructure and stronger regional connectivity.
Caspian Green Energy Corridor
A US$1 million grant will fund the first phase of a feasibility study for the Caspian Green Energy Corridor.
The project envisages laying a 400-kilometre subsea electricity cable between Azerbaijan and Kazakhstan. Uzbekistan would connect to the corridor through its onshore power grids.
The study will assess the project’s technical, economic, financial, environmental and social feasibility, as well as examine electricity transmission options and opportunities for cross-border electricity trade.
The Asian Development Bank (ADB) will provide an additional US$1 million in technical assistance, bringing total support for the study to US$2 million. AIIB and ADB will work together on project preparation.
Coastal Infrastructure for Offshore Wind Power
The second grant, worth US$100,000, will support the development of a concept for coastal infrastructure required for large-scale offshore wind power development in Azerbaijan. This includes port facilities, specialised vessels, substations and grid connections.
“This support is an important step towards turning the Caspian region’s renewable energy potential into tangible infrastructure projects ready to attract investment,” said Konstantin Limitovskiy, AIIB’s managing director general for investment operations in the public sector, Region 2, and project and corporate finance clients in the global region.
“By supporting the early-stage preparation of cross-border energy links and offshore wind infrastructure, we are helping lay the foundation for closer regional energy integration, energy diversification and sustainable growth.”
The grants will fund technical studies and early-stage feasibility work.
This preparation will help develop high-quality infrastructure that enables Azerbaijan to harness its offshore wind potential and expand cross-border energy links between Central Asia, the South Caucasus and, potentially, European markets.
The initiatives align with AIIB’s thematic priorities of Green Infrastructure and Connectivity and Regional Cooperation.
“The grant agreements signed with AIIB demonstrate international support for Azerbaijan’s strategic goals: large-scale offshore wind power development in the Caspian Sea and regional and intercontinental transmission of green energy,” said Parviz Shahbazov, Azerbaijan’s energy minister.
“Both projects are of strategic importance. They will help turn Azerbaijan’s substantial renewable energy potential into economic value, support exports of green energy resources from the Caspian region and Central Asia, and further strengthen our country’s role in regional energy integration.”
AIIB-Azerbaijan Partnership
The grants form part of AIIB’s broader work with partners to prepare high-quality cross-border infrastructure projects and mobilise resources for initiatives that strengthen regional connectivity and support the transition to a green economy.
The partnership between AIIB and Azerbaijan continues to expand through infrastructure investment and strategic cooperation, including under a joint declaration aimed at deepening engagement in priority sectors.
Azerbaijan will also host AIIB’s 12th Annual Meeting in Baku on 14–15 July 2027, marking another milestone in the development of bilateral relations.
