BAKU, Azerbaijan, October 6. The development of both local and cross-border grids is crucial for expanding investment in renewable energy projects in Azerbaijan and the region, the Deputy Chair of the Board of the Azerbaijan Green Energy Company (AGEC), Khayala Naghiyeva, said at the Azerbaijan-Germany Conference on Strategic Partnership and Connectivity in Baku today, Trend's correspondent reports.
She noted that AGEC is an investment company specializing in renewable energy investments in Azerbaijan and the region, and began operations in 2023.
“Until last year, we were essentially a startup. However, since last year, we have entered a phase of active growth much earlier than our strategic plan had envisaged. This rapid development is driven by market demand and regional dynamics. The program for the development of renewable and green energy, implemented by both the government and international organizations, played an important role in this process,” Naghiyeva noted.
According to her, the company’s portfolio currently includes two commercial projects for the construction of solar power plants and two projects for the development of wind power facilities.
“In the solar energy sector, we have made faster progress than we expected. One of the projects has already been commissioned in Nakhchivan and has a capacity of 25 MW. We are currently approximately halfway through the construction of the solar power plant in Jabrayil,” she said.
Naghiyeva added that the company is at an early stage of developing both onshore and offshore wind power projects.
“We are working closely with various consultants and technical experts to implement these projects. We clearly see our next steps and have a roadmap in place,” the AGEC representative emphasized.
She noted that the role of government institutions and the government should be viewed not only within the framework of partnerships but also as a mechanism that enables and supports projects.
“From the perspective of a private investor, reliable governance, a transparent regulatory framework, stable tariffs, government guarantees, banking support, as well as reliable contractors and suppliers play a decisive role in such projects. Coordination between the public and private sectors is essential for the success of projects and for reducing investment risks,” Naghiyeva said.
According to the AGEC representative, investment decisions and financing should remain the responsibility of the private sector. However, since land allocation, permitting and regulatory matters fall within the competence of the state, public-private partnership is inevitable.
“Over the past three years, we’ve had a fairly successful track record of negotiating and finalizing the terms of our solar projects. Although some regulatory frameworks are in place, there are still certain gaps in the procedures. For example, it’s not entirely clear where the roadmap begins and ends, or what steps should be taken at each stage. This creates certain difficulties for investors. I believe the public sector should work to make these mechanisms more practical,” she added.
In addition, Naghieva noted that during the implementation of the first projects, the parties operated on a “learn-as-you-go” basis, since the processes were new to both the government and local investors.
“Today, we have a clearer understanding of how management should be carried out, who bears the risks, and how to mitigate them. Now we need to formalize, document, and transparently present this experience to all parties,” noted the AGEC representative.
According to her, grid connection is of particular importance for the company’s growth.
“ For our company, which is in a growth phase, grid connection is not just a way to enter the market or reach the end consumer; it is a matter of scalability. Without the ability to connect to the grid at the local, regional, and cross-border levels, it will be very difficult for investors to expand their businesses in the green energy sector,” emphasized Naghieva.
She noted that the presence of reliable buyers, proper power purchase agreements (PPAs), and real demand are among the key conditions for investment attractiveness.
“Even if we are willing to invest, without reliable buyers, proper PPAs, and real demand, these investments will not be attractive. This is because the market and the region are limited. In this regard, cross-border grid connections are vital for business expansion,” she said.
Naghiyeva added that European countries and the European Union can play an important role in creating market opportunities and making commitments. In her view, this could provide momentum to accelerate investment in renewable energy in Azerbaijan and the region.
The Deputy Chair of AGEC emphasized the importance of creating broad opportunities for small and medium-sized enterprises and small-scale investments in the renewable energy sector.
“To achieve this, regulations and procedures must be simplified. This could take the form of a ready-made package or a ‘one-stop shop’ model. Interested small businesses or individuals can obtain this ready-made package and implement it,” Naghiyeva said.
She noted that tariff uncertainty, difficulties with grid connection, and complex technical requirements hinder the integration of small and medium-sized enterprises into the renewable energy sector.
“Until these issues are resolved, it will continue to be very difficult for small and medium-sized enterprises to integrate into the network infrastructure and take an interest in this field,” she added.
