Total investment in the Caspian-Black Sea-Europe Green Energy Corridor project, aimed at delivering renewable energy from the Caspian region to Europe, is estimated at approximately €22.1 billion, with €14.3 billion required for transmission infrastructure, Report informs, citing the Green Energy Corridor Power Company (GECO).
The company noted that the project, which will connect Azerbaijan, Georgia, Romania and Hungary, is set to move into the implementation phase following the completion and formal approval of its feasibility study.
According to the approved plan, the energy corridor will consist of a 3.9 GW multi-terminal high-voltage direct current (HVDC) transmission system, including three lines with a capacity of 1.3 GW each. For every line, the submarine cable crossing the Black Sea will be approximately 1,124 km long and laid at depths of up to 2,200 meters.
The route will start in Baku, pass through Georgia with landfall points in Anaklia and Poti, continue through Tbilisi and Tskaltubo, cross Romania via Constanta and Bucharest, and extend to the Albertirsa hub in Hungary.
Of the total investment, around €7.8 billion is planned for the development of generation capacity. The project's estimated internal rate of return (IRR) stands at 11.7%, while its net present value (NPV) is projected at €26.6 billion.
The project will be implemented in phases. The first 1.3 GW line is scheduled to enter operation in 2032, enabling exports of up to 8 TWh of renewable electricity annually. The second line, designed to deliver power to Bucharest, is planned for 2036, while the third line, with reception facilities in Constanta, is expected to become operational in 2040.
Annual renewable energy supplies from the Caspian region to the European Union are expected to reach 20 TWh by 2040.
The project's resource base will primarily rely on Azerbaijan's offshore wind potential in the Caspian Sea, estimated at around 25 GW, or approximately 96 TWh of annual generation. An additional 19 GW of solar and onshore wind capacity will serve as supplementary sources.
By 2040, the project is expected to reduce carbon dioxide emissions by 3.6 million tonnes per year.
A hybrid financing model combining public and private capital has been developed for the transmission infrastructure. Each 1.3 GW line will be divided into a 500 MW regulated segment and an 800 MW commercial segment.
The regulated portion will operate under a regulated asset base model, with the real pre-tax weighted average cost of capital (WACC) set at 8%. The commercial segment will generate revenue from congestion management and long-term electricity transmission commitments.
Financing is expected to come from long-term loans provided by international financial institutions, export credit agencies and commercial banks, as well as grants from the European Union's Connecting Europe Facility (CEF).
GECO has also announced the start of accepting expressions of interest from strategic partners and potential investors.