ADB ready to strengthen co-op with Azerbaijan in green investments, carbon markets

The Asian Development Bank (ADB) hopes to continue investing in Azerbaijan's energy sector, Sunniya Durrani-Jamal, head of the ADB Country Office in Azerbaijan, said at the 13th International Caspian Energy Forum in Baku, Report informs.

"We have traditionally invested in Azerbaijan's energy networks and hope to continue this work. Another area that I think is worth paying attention to is energy storage. I know the government is also considering this issue, and it is another area that could attract investors. A third area, crucial for the energy transition, is energy efficiency. And this isn't just about energy systems-we can consider various sectors, such as cement production, where energy consumption is very high. Reducing emissions through private investment helps mitigate these risks," said Sunniya Jamal.

She also believes that traditional and non-traditional areas, such as water management or heating systems, are also promising, as they can significantly improve energy efficiency.

"Finally, speaking of infrastructure, the development of research and development, for example, in the field of blue or green hydrogen," she said.

The ADB country director noted that over more than 25 years, the bank has invested approximately $5.6 billion in Azerbaijan, of which approximately $4.4 billion, or approximately $1.2 billion, has been invested in the private sector.

"Regarding the renewable energy sector, you mentioned risks and financial instruments-I prefer to consider this in five key areas. I think the most important for investors is policy and the regulatory environment. And here, I believe, the Azerbaijani government's position is very clear: you have a goal of achieving net-zero emissions by 2050 and a clear target of 30% renewable energy in the country's total energy production," she said.

Jamal believes that financial markets are another area of ​​interest: "It was mentioned earlier that five-year financing instruments are available at the local level. And here, again, institutions like ours can help companies raise funds, for example, by issuing 'green bonds.' Instead of displacing banks, we can buy back these bonds, helping attract capital and spur private investor participation.

Another area that interests me personally, and which we are working on jointly with the Ministry of Ecology and Natural Resources, is carbon pricing. The CBAM (carbon adjustment at the EU border) mechanism was mentioned, and this is another area where we can look to the future and develop carbon markets."

According to her, the ADB is considering credit enhancement mechanisms for individual projects: "We can provide guarantees-as we did with the Shah Deniz gas field about 10 years ago, when we added them to our loan financing. Insurance products and collateral can also be used in project design. And, of course, if a project requires risk mitigation, we can apply special instruments, including guarantees."