How Masdar is transforming Azerbaijan's energy landscape

The energy sector is one of the largest sources of greenhouse gas (GHG) emissions, making the transition to cleaner alternatives essential for combating climate change. With significant advancements in environmental technologies and a growing demand for green energy, it is becoming increasingly evident that renewable energy will be the primary energy source for our planet in the near future. One company accelerating this process is Masdar, known as the Abu Dhabi Future Energy Company, a global leader in renewable energy and sustainable development.

The state-owned Masdar was founded in 2006 by the UAE government. It is owned by three shareholders: the Abu Dhabi National Oil Company (ADNOC), the Abu Dhabi National Energy Company PJSC (TAQA) and the UAE’s sovereign wealth fund, the Mubadala Investment Company.

The company actively invests in projects worldwide, but in recent years has become increasingly active in Central Asia and the Caucasus, including in Azerbaijan. In 2023, Masdar opened its office in Baku and completed the construction of the Garadagh Solar Power Plant, the largest in the Caspian region and CIS, costing $262mn, and built in just one and a half years.

Masdar's successful debut in Azerbaijan has stimulated further cooperation. The company is now constructing solar power plants in the Banka settlement of the Neftchala district and the Gunes settlement of the Bilasuvar district, as well as the Absheron-Garadagh Wind Power Plant near the Baku-Shamakhi highway. It is expected that the solar power plants will be commissioned in 2026, with the construction of the Absheron-Garadagh Wind Power Plant taking three years.

Recently, during the Baku Energy Week, SOCAR and Masdar signed agreements for three renewable energy projects. These agreements cover the construction of one wind and two solar power plants in Azerbaijan. The successful cooperation in renewable energy between SOCAR and Masdar aims to diversify energy sources, expand the use of Azerbaijan's alternative energy potential and ensure a smooth energy transition.

The implementation of these projects will save approximately 2.3bn kWh of electricity annually and prevent the emission of about 1mn tonnes per year (tpy) of carbon dioxide per year. The planned wind and solar power plant projects will significantly contribute to sustainable development, aligning with Azerbaijan's green agenda goals. As stated by Masdar's Director of Development and Investments for the Asia and Africa regions, Abdulla Zayed, the company intends to remain a strategic investor in Azerbaijan's renewable energy sector. Additionally, Masdar is conducting market research on the production of "green" hydrogen and "green" ammonia in Azerbaijan.

Through these initiatives, Azerbaijan plans to reduce GHG emissions by 35% by 2030 (compared to 1990 levels) and by 40% by 2050. This goal was committed to in 2016 under the Paris Climate Agreement. Moreover, the government has ambitious plans to transform Azerbaijan into a global exporter of green energy. In this context, the country's future economic development is closely linked to successful cooperation with Masdar, which lays a solid foundation for achieving this goal.

Masdar's approach to renewable energy in Azerbaijan is not just about building power plants; it’s about fostering a culture of sustainability and innovation. The company employs cutting-edge technology and best practices from around the world to ensure that its projects are efficient, reliable, and environmentally friendly. This holistic approach includes community engagement, ensuring that local populations benefit from the economic opportunities and improved energy security that come with renewable energy projects.

Furthermore, Masdar's commitment to research and development in the field of green hydrogen and ammonia positions Azerbaijan as a potential leader in next-generation energy solutions. Green hydrogen, produced using renewable energy sources, is seen as a key component in the global effort to decarbonise industries that are difficult to electrify, such as heavy transportation and manufacturing.

The strategic vision for Azerbaijan’s energy future, supported by Masdar’s investments, includes not only meeting domestic energy needs but also turning Azerbaijan into a significant exporter of renewable energy. This vision aligns with the European Union's goals for energy diversification and security, potentially opening new markets for Azerbaijani green energy in Europe.

In addition to technological and economic benefits, Masdar's projects are expected to have a significant environmental and social impact. The reduction in GHG emissions will contribute to global climate mitigation efforts, while the creation of new jobs and infrastructure development will support local communities and economies.

Masdar’s transformative projects in Azerbaijan are a testament to the power of international cooperation in addressing global challenges. By leveraging its expertise in renewable energy, Masdar is helping Azerbaijan to not only meet its energy needs but also to become a leader in the global transition to sustainable energy. This partnership sets a powerful example of how countries and companies can work together to create a cleaner, more sustainable future for all.