AIIB and ADB to provide $2 million for Caspian green energy corridor study

The Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB) plan to provide $2 million to prepare a feasibility study for the Caspian Green Energy Corridor project.

According to Report, citing the AIIB, the infrastructure bank has already allocated a $1 million grant for the first phase of the feasibility study.

The project envisages the construction of a 400-kilometer subsea electricity cable connecting Azerbaijan and Kazakhstan, while Uzbekistan will join the corridor through land-based power grids.

The study will assess the project's technical, economic, financial, environmental and social feasibility. It will also examine electricity transmission options and opportunities for cross-border electricity trade.

"The ADB will provide an additional $1 million in technical assistance, bringing total support for the study to $2 million. The AIIB and ADB will work together on project preparation," the AIIB said in a statement.

Two grant agreements totaling $1.1 million were signed today between the AIIB and the Azerbaijani government. The funding was provided through the Multilateral Cooperation Center for Development Finance (MCDF) and mobilized with the AIIB's assistance.

The grants will support the preparation of the Caspian Green Energy Corridor project and the project titled "Coastal Infrastructure for a Large-Scale Offshore Wind Farm in Azerbaijan." These are the first grant agreements between the AIIB and Azerbaijan supported by the MCDF.

The AIIB said the agreements open a new avenue for cooperation in project preparation and lay the groundwork for future investments in sustainable energy infrastructure and stronger regional connectivity.

The second grant, worth $100,000, will fund the development of a concept for the coastal infrastructure needed to support large-scale offshore wind power development in Azerbaijan. This includes port facilities, specialized vessels, substations and grid connections.

"This support is an important step toward translating the Caspian region's renewable energy potential into tangible infrastructure projects ready to attract investment," said Konstantin Limitovskiy, AIIB's chief investment officer for public sector (Region 2) and project and corporate finance clients (Global).

He added that supporting the early-stage preparation of cross-border energy links and offshore wind infrastructure would help lay the foundations for greater regional energy integration, diversification and sustainable growth.

The grants will finance technical studies and early-stage feasibility work to ensure that the infrastructure is adequately prepared. The projects are expected to help Azerbaijan harness its offshore wind potential and expand cross-border energy connections between Central Asia, the South Caucasus and, potentially, European markets.

Azerbaijani Energy Minister Parviz Shahbazov said the agreements reflected international support for the country's strategic goals of developing large-scale offshore wind energy in the Caspian Sea and expanding regional and intercontinental green energy transmission.

"Both projects are of strategic importance: they will help turn Azerbaijan's abundant renewable energy potential into economic value, facilitate green energy exports from the Caspian region and Central Asia, and further strengthen our country's role in regional energy integration," Shahbazov said.

The grants form part of the AIIB's broader cooperation with partners to prepare high-quality cross-border infrastructure projects and mobilize resources for initiatives that strengthen regional connectivity and support the transition to a green economy.

The partnership between the AIIB and Azerbaijan continues to expand through infrastructure investment and strategic cooperation, including a Joint Declaration aimed at deepening collaboration in priority sectors.

Azerbaijan is also scheduled to host the AIIB's 12th Annual Meeting in Baku on July 14-15, 2027, marking another milestone in bilateral cooperation.

The Asian Infrastructure Investment Bank is a multilateral development bank focused on financing sustainable infrastructure. It began operations in 2016 and currently has 111 approved members worldwide, with $100 billion in capital. The bank has received the highest AAA credit rating from leading international rating agencies.

Working with its partners, the AIIB mobilizes capital and invests in infrastructure and other productive sectors to support sustainable economic development and strengthen regional connectivity.