Azerbaijan’s Energy Ministry and International Finance Corporation (IFC) signed a memorandum of understanding on cooperation in the use of offshore wind energy resources in order to develop the renewable energy sector in Azerbaijan.

Azerbaijan is yet to tap into its significant potential for renewable energy and energy efficiency. The government has, however, drafted several laws to that end which are pending approval. Higher ambition and more effort in renewable energy and energy efficiency will also help the country save natural gas and oil for exports and reduce its dependence on oil and gas sector.

IRENA – the International Renewable Energy Agency – said in a recent report that despite its reliance on oil and gas, “the country has excellent wind and solar resources, along with significant prospects for biomass, geothermal and hydropower development.”

The memorandum is aimed at promoting the use of renewable energy sources in Azerbaijan, as well as supporting the participation of the private sector in this area to improve the financial sustainability and efficiency of the energy sector.

The document says that cooperation with the IFC envisages an assessment of the potential of offshore wind power in Azerbaijan and the development of a roadmap, and at the next stage – the tender management related to relevant offshore projects, the definition of partnerships with the private sector, and the implementation of auxiliary investments.

“Renewable energy has been determined by the head of state Ilham Aliyev as one of the significant priorities of Azerbaijan’s socio-economic and diversified development course, as well as achieving a clean environment by 2030,” Parviz Shahbazov, energy minister, said after the signing ceremony.

“It is necessary to use the offshore wind energy potential to ensure that the renewable energy has a significant position in production and consumption.”

He said that cooperation efforts with IFC would contribute to the development of offshore wind energy production in Azerbaijan, as well as the use of renewable energy and the reduction of carbon emissions.

“One of IFC’s strategic priorities in Azerbaijan is to support the country’s move to a new private-sector-led growth model,” Wiebke Schloemer, IFC Director for Europe and Central Asia, said.

“Helping the nation—rich in oil and gas resources—explore and develop offshore wind energy can increase private sector participation, while also supporting energy transition.”

The technical potential of offshore wind energy in Azerbaijan is estimated at 157 gigawatts, according to a preliminary analysis provided by the Energy Sector Management Assistance Programme.