The Asian Infrastructure Investment Bank (AIIB) and the Republic of Azerbaijan have signed two grant agreements totaling USD1.1 million, financed by the Multilateral Cooperation Center for Development Finance (MCDF) Finance Facility and mobilized by AIIB, to support the preparation of the Caspian Green Energy Corridor and associated coastal infrastructure for large-scale offshore wind development in the Caspian Sea.
This marks AIIB’s first two grant agreements with Azerbaijan, supported by the MCDF, for the Caspian Green Energy Corridor and the Coastal Infrastructure Project to Support Large-Scale Offshore Wind Farm in Azerbaijan. This milestone opens a new avenue for cooperation on project preparation, laying the groundwork for future investments in sustainable energy infrastructure and stronger regional connectivity.
A USD 1 million grant will support the first phase of a feasibility study for the Caspian Green Energy Corridor, including a proposed 400-kilometer submarine electricity cable connecting Azerbaijan and Kazakhstan, with Uzbekistan connected through onshore transmission networks. The study will assess the project's technical, economic, financial, environmental and social feasibility, including transmission options and opportunities for cross-border electricity trade. Together with USD1 million in technical assistance from the Asian Development Bank (ADB), total preparation support for the study will reach USD2 million, with AIIB and ADB working jointly on project preparation.
A second USD100,000 grant will support concept development for coastal infrastructure needed to enable large-scale offshore wind development in Azerbaijan, including port facilities, specialized vessels, substations and grid connections.
“This support is an important step toward translating the Caspian region’s renewable energy potential into investable infrastructure,” said Konstantin Limitovskiy, Chief Investment Officer, Public Sector (Region 2) & Project and Corporate Finance Clients (Global), AIIB. “By supporting early-stage preparation of cross-border electricity connections and offshore wind infrastructure, we are helping lay the groundwork for greater regional energy integration, energy diversification and sustainable growth.”
The grants will support early-stage technical and feasibility work aimed at strengthening the preparation of infrastructure that could enable Azerbaijan to harness its offshore wind potential while facilitating greater cross-border electricity connectivity between Central Asia, the South Caucasus and, potentially, European markets. In this way, the initiatives align with AIIB’s thematic priorities of Green Infrastructure and Connectivity and Regional Cooperation.
“The grant agreements signed with AIIB demonstrate international support for Azerbaijan’s strategic objectives of developing large-scale offshore wind energy in the Caspian Sea and advancing regional and intercontinental green energy transmission,” said Parviz Shahbazov, Minister of Energy of the Republic of Azerbaijan. “Both projects are of strategic importance for translating Azerbaijan’s abundant renewable energy potential into economic value, facilitating the export of green energy resources from the Caspian region and Central Asia, and further strengthening our country’s strategic role in regional energy integration.”
The grants reflect AIIB’s broader efforts to work with partners to prepare high-quality, cross-border infrastructure and mobilize resources for projects that strengthen regional connectivity and support the green transition.
AIIB’s partnership with Azerbaijan continues to expand through infrastructure investment and strategic cooperation, including a Joint Declaration aimed at deepening engagement in priority sectors. Azerbaijan will also host AIIB’s 12th Annual Meeting in Baku on July 14–15, 2027, marking another milestone in the growing relationship.
