Nataly Mouravidze: EBRD aims to ensure investments contribute to sustainable future for Azerbaijan - INTERVIEW

In January, the European Bank for Reconstruction and Development (EBRD) approved a new strategy for Azerbaijan for 2025–2030, aimed at supporting economic diversification, developing green energy, modernizing transport infrastructure, and digital transformation.

In an interview with Report, Nataly Mouravidze, head of the EBRD Resident Office in Azerbaijan, spoke about the bank’s key priorities, opportunities for financing the non-resource sector, prospects for railway and logistics projects, and the role of the private sector in the country’s sustainable economic growth.

Report presents the interview:

- Tell us about the key priorities of the new cooperation strategy with Azerbaijan. What steps does the bank intend to take to promote economic diversification and reduce dependence on hydrocarbon exports?

- Economic diversification is at the heart of our work in Azerbaijan, and we have laid out this vision in our new country strategy, recently approved by our Board. Over the next five years, we will focus on building a more diverse, inclusive, and sustainable economy, driven by private-sector growth, innovation, and regional connectivity.

Azerbaijan has already taken steps to expand its non-oil sector, but considerable untapped potential remains. That’s why we are helping businesses to access finance, which is a crucial step to generate value and drive economic diversification.

We recently extended our first green loan to Bank Respublika to support sustainable investments, and we launched a $50 million trade finance facility with the International Bank of Azerbaijan to facilitate export-import operations. In addition to financing, we provide hands-on support to small and medium businesses through our Advice to Small Businesses (ASB) program, helping them innovate, adopt new technologies, and improve competitiveness.

Enhancing business environment and investors’ confidence are essential to attracting more private investment beyond -hydrocarbons. We are working with the authorities, state-owned enterprises, and the private sector on economic and corporate governance reforms that contribute to these objectives.

Azerbaijan’s strategic position along the Middle Corridor also presents major opportunities for trade and investment, and we are keen to support projects that enhance regional connectivity.

Our aim is to support Azerbaijan’s goal of building a modern, resilient economy that is less dependent on hydrocarbons and more focused on sustainable, private-sector-driven growth. We already have a strong foundation to build on, and with the right policies and investments, we can unlock long-term opportunities for the country and its people. I’m very optimistic about our next 5-year period and beyond.

- The EBRD’s new strategy for Azerbaijan prioritizes the development of a green economy, including renewable energy, energy efficiency, sustainable transport and clean technologies. What new green energy initiatives is the bank considering and how much financing is it prepared to provide?

- Developing a green economy is another core pillar of our new country strategy and we are fully committed to supporting the country’s energy transition. Our engagement goes beyond financing as we are also deeply involved in policy dialogue to help shape the right regulatory framework for a sustainable economy.

One of the very significant steps Azerbaijan has taken is the launch of competitive renewable energy auctions, which the EBRD has actively supported. This process ensures that projects are selected transparently and competitively, attracting the best possible investors. The country’s first renewable energy auction took place earlier last year, with the winner announced at COP29 in Baku. This was a major milestone for Azerbaijan’s green transition. Additionally, we have been working closely with the government to establish the Azerbaijan Energy Regulator Authority (AERA), which will be key to fostering a well-regulated, competitive energy market.

In terms of investments, we have already financed over 1.2 gigawatts of renewable energy, including the Garadagh Solar Plant with Masdar (230 megawatts) and the Absheron-Khizi Wind Power Plant with ACWA Power (240 megawatts). More recently, we financed Bilasuvar Solar (445 megawatts) and Neftchala Solar (315 megawatts) in partnership with Masdar and SOCAR Green. These projects represent a significant step towards Azerbaijan’s target of having renewables contribute 30% of its electricity generation by 2030.

Looking ahead, we remain open to financing additional renewable projects that align with our environmental, governance, and transparency standards. We are also exploring ways to support grid infrastructure improvements, which will be crucial for integrating more renewable energy into the system.

At the same time, we see great potential in hydrogen energy, and we have already supported the government in developing a National Hydrogen Strategic Outlook, which was presented at COP29 and published recently. Our analysis confirms that Azerbaijan is well-positioned to develop a low-carbon hydrogen economy, given its vast renewable energy resources. We are now considering supporting the implementation of this strategy, ensuring that the country can leverage hydrogen as part of its long-term energy transition.

Another key area we are working on is helping Azerbaijan develop a sectoral low-carbon and climate-resilient pathway for power generation. This will be crucial in defining the country’s energy system for the future and ensuring a balanced, sustainable approach to decarbonization.

Azerbaijan has taken important steps towards a greener energy mix, and we are proud to be a reliable partner in this journey. Our focus is on continuing to support both policy reforms and investments that will drive long-term, sustainable change in the country’s energy sector.

- Is the EBRD considering involvement in the Black Sea energy cable project for green electricity export or the broader Central Asia–Caspian–Europe energy corridor? What conditions would be necessary for the bank to support such initiatives financially?

- The EBRD is closely following developments around the Black Sea energy cable project and the broader Central Asia–Caspian–Europe energy corridor. Given our long-standing presence and investment across all the countries involved, we are well positioned to support such initiatives and we are definitely interested in exploring opportunities where we can add value.

Projects of this scale require careful economic feasibility assessments to ensure they are commercially viable and deliver real benefits for the region. Additionally, strong commitment from both sovereign and private sector stakeholders is essential. These are complex, cross-border initiatives that demand a well-coordinated approach, clear regulatory frameworks, and financial sustainability.

At this stage, we are monitoring progress and engaging with partners to better understand how we can contribute. If the right conditions are in place: a solid business case, a clear regulatory environment and strong stakeholder support, we would be open to considering financial involvement.

Azerbaijan has great potential to export green electricity, and we see projects like these as important steps toward greater regional energy integration and sustainability. We look forward to seeing how they evolve and stand ready to engage further.

- An investment decision on doubling the Southern Gas Corridor capacity is expected in 2025. Is the EBRD ready to consider participating in financing this project? Does the bank consider the prospect of reducing the carbon footprint of transported gas through the implementation of CO₂ capture and storage technologies or other mechanisms?

- We want to ensure that our investments contribute to a sustainable future. When it comes to large-scale energy infrastructure projects, we believe it is essential that they not only address today’s energy needs but are also aligned with the future transition.

The decision on expanding the SGC rests with the Azerbaijani authorities. If they decide to approach the EBRD for financing, we will of course work with them to assess the project. But we will have to consider various factors including our Paris Agreement obligations. 

- Infrastructure and transport are key sectors for economic development. Is the EBRD ready to finance projects for modernizing Azerbaijan's railway network, including within the East-West and North-South corridors? Is there interest in financing projects related to multimodal transportation, port infrastructure, or logistics hubs? 

- Strengthening regional connectivity is one of the two key strategic priorities of the EBRD in Azerbaijan for 2025-2030. Efficient and modern transport infrastructure plays a crucial role in facilitating trade and driving economic development and we are keen to support Azerbaijan’s ambitions in this area.

Railways, as the least carbon-intensive mode of transport, are particularly important for achieving connectivity goals in a more sustainable way. We recognize that Azerbaijan is making significant steps in expanding its transit capacity, especially along the Middle Corridor, which has gained importance in the light of geopolitical developments. This route has the potential to further integrate the region and strengthen trade links.

The EBRD is ready to consider financing projects that enhance Azerbaijan’s railway infrastructure, multimodal transport solutions, logistics hubs, and port infrastructure. Beyond investments, we are also open to supporting policy reforms and capacity-building measures that improve efficiency and competitiveness in the sector.

Given the growing demand for transit flows across the Middle Corridor, we are in active discussions with the authorities to explore new connectivity projects. We look forward to continuing our engagement and identifying opportunities where we can add the most value.

- What initiatives is the EBRD considering in digital transformation and innovation in Azerbaijan? Is there interest in financing digital infrastructure, "smart" cities, technology startups, or other IT projects? 

- Digital transformation and innovation are key drivers of economic competitiveness and we see great potential in supporting Azerbaijan’s ambitions in this space. We are looking to expand our involvement in digital infrastructure, smart cities and technology-driven solutions that enhance both economic growth and quality of life.

One area where we are already engaged is sustainable urban development. Through our Green Cities program, we are helping Azerbaijan’s second-largest city, Ganja, improve solid waste management, street lighting and water infrastructure. Smart technologies can play a crucial role in making these systems more efficient and environmentally friendly and we are open to financing projects that support digitalization in urban infrastructure.

We also recognize the importance of expanding digital infrastructure, particularly in broadband access and connectivity, which are essential for a modern economy. Additionally, we have a strong track record in supporting SMEs and startups, including those in the tech sector and we are keen to explore opportunities to finance innovation-driven businesses in Azerbaijan.

Ultimately, our goal is to help Azerbaijan utilize the power of digital transformation, whether through infrastructure investments, private sector financing, or policy engagement, to create a more connected economy.

- What role does the bank assign to the private sector in implementing its projects? In this regard, how active are negotiations with local and international investors? Is the EBRD ready to expand private business financing programs in priority economic sectors?

- The private sector is at the heart of what we do. At the EBRD, we firmly believe that sustainable economic growth is driven by a dynamic and competitive private sector, and this principle guides our work in Azerbaijan. Over the years, we have consistently supported private businesses, through financing, advisory services and policy engagement, helping to create an environment where entrepreneurship and investment can thrive.

We are absolutely ready to expand our financing programs for private businesses. Through our partnerships with local banks, we are increasing access to finance for SMEs and corporates, including through green loans and trade finance facilities. At the same time, we are actively engaging with international investors who bring capital, expertise and technology to Azerbaijan, strengthening the country’s integration into global value chains.

Ultimately, a strong private sector means a stronger economy. Our role is to catalyze private investment, help businesses grow and support reforms that make Azerbaijan an even more attractive destination for investment.

Source: https://report.az/en/finance/nataly-mouravidze-ebrd-aims-to-ensure-investments-contribute-to-sustainable-future-for-azerbaijan-interview/