BAKU, Azerbaijan, September 9. Cross-border connectivity, the Middle Corridor, will be among the key pillars of cooperation between the Asian Infrastructure Investment Bank (AIIB) and Azerbaijan, Conor Barry, senior economist at AIIB, said in an exclusive interview with Trend.
"The key pillars for us and for the government will be transport and cross-border connectivity, the Middle Corridor, enhancing more supply chain resilience, and the role Azerbaijan plays in supply chain resilience, connectivity between Asia and Europe, connectivity between parts of Asia, and climate resilience within Azerbaijan itself, and the enhanced role Azerbaijan can play in wider green finance and renewable energy," he said.
Barry pointed out that the Middle Corridor is particularly important, not just for Azerbaijan, but for the region as a whole.
"And it's a core pillar for us, in particular, in difficult geopolitical times that we face at the moment. As a multilateral institution, we consider it quite important that we are seen as an organization that's helping cooperation to happen, both in transport infrastructure, but also in energy infrastructure, and creating green electricity market between Azerbaijan and its neighbors is an important initiative that we want to be part of," he explained.
He went on to add that AIIB is very client-driven.
"We're not coming in as the AIIB with our fixed priorities for Azerbaijan. We're working in partnership with what the government of Azerbaijan wants to deliver for the people of Azerbaijan. We try and match that with our overall strategies and our overall direction that we feel is useful for infrastructure, and that looks at cross-border connectivity, green infrastructure, digital-enabled infrastructure. But this is driven by the areas which the government of Azerbaijan wishes to develop infrastructure within the country, rather than driven by what AIIB feels is the right form of infrastructure for a given country," added Barry.
AIIB’s climate finance strategy and opportunities for Azerbaijan
He pointed out that AIIB's climate finance touches on a whole range of different sectors.
"It's not a simple individual project. We have our overall corporate strategy of going beyond 50% of all of our financing being climate finance. We're well beyond that in achievement and now we're looking at 70%. I think our next shift is to ensure that is not just a quantitative number, but that's having a qualitative impact, and ensuring that it is climate resilient. We're enhancing resilience of countries, which is a bigger challenge than just decarbonization. It cuts across a wider range of sectors and touches on different aspects of vulnerability, pre-existing vulnerabilities that are present within countries. The core part of our partnership is working with countries, identifying what their exposure is to climate risk, identifying what hazards they're facing, where there's vulnerability, and how infrastructure can help address that vulnerability," said Barry.
The senior economist noted that the Bank has done quite a few renewable entry projects, mainly large-scale solar projects within Azerbaijan.
"And we think this will be an ongoing opportunity for private investment. Our aim here is to ensure that we're getting more, mobilizing more private capital, so that the country can rely not just on its own resources and its own lending with us, but that we're acting as a multiplier to get more private capital, both domestic private, also mobilizing international private capital for renewable energy and electric mobility," he said.
Development of multi-year investment program
Barry noted that in general, AIIB's approach towards country programming is a partnership with the country.
"We don't fix a deadline and a timeline for agreement of that. We don't require to have a multi-year rolling work program in order for us to invest in a country. We've been investing in Azerbaijan for over 10 years now without the multi-year rolling work program. We'll develop that program and it will give clarity to both sides as to priorities, but that also isn't a fixed endpoint where we say we've agreed this rolling work program and we don't invest other activities. If you see our multi-year rolling work plans in other countries where we have agreed them, if then priorities change with government or a new issue comes up, or a new project needs financing, that's added to the multi-year rolling work program. It's not viewed only as this is the only things that we finance for a given country. In that sense, agreeing that and having a final deadline for it is not the most important. It just sends the signal of the level of cooperation that the Bank and the country will have over the years into the future," he concluded.
