(MENAFN- AzerNews) By Nazrin Abdul, AZERNEWS
In recent years, the economic ties between Azerbaijan and SaudiArabia have flourished, extending beyond the realm of traditionaloil and gas industries. The collaboration between the two nationshas expanded into renewable energy, marking a significant milestonein their bilateral relations.
One of the focal points uniting Azerbaijan and Saudi Arabia istheir joint commitment to addressing global climate challenges commitment takes center stage with Azerbaijan hosting theupcoming COP29 event, underscoring the mutual interest in renewableenergy production and the development of sustainable energysectors.
A key player in this collaboration is "ACWA Power," a leadingSaudi Arabian company specializing in renewable energy. Currently,ACWA Power is undertaking a groundbreaking project in Azerbaijan,constructing a 240 MW wind power plant. This initiative stems froma Memorandum of Understanding signed in 2022 between Azerbaijan'sMinistry of Energy and ACWA Power, focusing on offshore wind energycooperation.
Highlighting the significance of this partnership, a ceremonywas held on January 13, 2022, attended by the President ofAzerbaijan, Ilham Aliyev, and Saudi Arabia's Minister of Energy,Prince Abdul Aziz bin Salman Al-Saud, to mark the commencement ofthe "Khizi-Absheron" Wind Power Plant project. Once operational in2025, this plant will be Azerbaijan's largest renewable energyfacility, capable of producing one billion kilowatt-hours ofelectricity annually, thereby reducing carbon emissions andpreserving natural resources.
The collaborative efforts extend beyond energy production. InApril 2024, Azerbaijan's Minister of Economy, Mikayil Jabbarov,engaged in discussions with Amin Nasser, President, and CEO of"Saudi Aramco," Saudi Arabia's national oil company. The talksexplored investment opportunities in Azerbaijan's energy sector andpotential joint ventures.
Moreover, agreements on green fertilizers and renewable energyprojects were signed between Azerbaijan's State Oil Company (SOCAR)and ACWA Power, further solidifying the commitment to sustainabledevelopment. As part of the Southern Gas Corridor ConsultativeCouncil, SOCAR and ACWA Power penned an agreement in 2023 tocollaborate on wind, solar, and green hydrogen projects inAzerbaijan.
SOCAR has set ambitious targets, aiming to increase the share ofrenewable energy sources in electricity generation capacity to 30percent by 2030, with a concurrent reduction of greenhouse gasemissions by 40 percent by 2050. These goals align with the broaderagenda of promoting sustainable economic development and reducingenvironmental impact.
Looking ahead, the collaboration between Azerbaijan and SaudiArabia holds promise for future endeavors, including wind power andseawater desalination projects. The exploration of alternativeenergy sources and potential green energy initiatives signifies along-term commitment to environmental stewardship and economicprosperity.
In continuation of fostering economic ties, representatives fromAzerbaijan's Export and Investment Promotion Agency (AZPROMO)embarked on a business trip to Saudi Arabia in April 2024. Meetingswere held with various institutions in Riyadh, culminating indiscussions with the Islamic Chamber of Commerce and Development(ICCD) to explore avenues for joint ventures and partnerships.
As Azerbaijan and Saudi Arabia deepen their economiccooperation, the pursuit of renewable energy projects emerges as acornerstone of their shared vision for a sustainable future.
During the gathering of the Azerbaijan-Saudi ArabiaJoint Business Council, discussions revolved around the exportcapabilities of both nations and business as well as investmentprospects within recently liberated Azerbaijani territories.
The 4th meeting was held in Riyadh under the organization of theSmall and Medium Business Development Agency (KOBİA) of Azerbaijanand the Federation of Saudi Chambers. Topics covered includeddiscussions on bilateral export potential, investment opportunitiesin recently liberated Azerbaijani regions, avenues for enhancingcooperation between business communities in trade and investment,joint initiatives and projects, bolstering the role of theAzerbaijan-Saudi Arabia Joint Business Council in these domains,and amplifying the contribution of SMEs to investmentpromotion.
The Azerbaijan-Saudi Arabia Joint Business Council wasestablished in December 2022 under the Agreement signed betweenSMBDA and the Federation of Chambers of Saudi Arabia. TheAzerbaijan-Saudi Arabia Joint Business Council, which will berepresented by businesspersons from both countries, will supportentrepreneurs' initiatives, help to establish direct ties betweenthem, organize mutual visits, meetings and various events, andexchange information between businessmen.
A Deepening Alliance Beyond Energy
The longstanding cooperation between Azerbaijan and Saudi Arabiaextends far beyond the realms of energy, encompassing economic,investment, and cultural ties. Central to this collaboration istheir joint participation in the OPEC+ format, where both nationshave played pivotal roles in stabilizing the global oil market.
Since the inception of the OPEC+ format, Saudi Arabia andAzerbaijan have worked closely together to reconcile supply anddemand in the world oil market, fostering stability through yearsof concerted efforts.
Moreover, Azerbaijan has emerged as an attractive destinationfor Saudi Arabian investment, thanks to its conducive businessenvironment and robust legal framework that ensures the protectionof foreign investments. The country's recent energy sector reformsand overall development trajectory, coupled with its stability andsecurity, further bolster its appeal to investors.
Beyond economic cooperation, Azerbaijan and Saudi Arabia sharevibrant ties in tourism, underpinned by their cultural andreligious affinities. Azerbaijan's favorable climate, sceniclandscapes, and cultural richness attract a growing number oftourists from Saudi Arabia each year. Notably, in the first twomonths of 2024, Saudi Arabian citizens accounted for 3.4 percent ofthe total tourists visiting Azerbaijan, reflecting thestrengthening tourism links between the two nations.
The historic visit of National Leader Heydar Aliyev to theKingdom of Saudi Arabia in July 1994 marked a turning point in thecomprehensive development of bilateral relations. Since then, theties between Azerbaijan and Saudi Arabia have continued to deepen,with Azerbaijan prioritizing bilateral and multilateral relationswith Arab countries, rooted in shared religious and culturalheritage.
The Kingdom of Saudi Arabia holds a special place inAzerbaijan's diplomatic engagements, given its prominence in theIslamic and Arab worlds. The enduring bond between Azerbaijan andSaudi Arabia underscores a commitment to mutual prosperity andsolidarity within the broader Muslim community and beyond. As theserelations evolve, both nations look forward to further enhancingcooperation across various sectors for the benefit of theircitizens and the wider region.
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