What COP29 To Bring To Azerbaijan: Dividends And Prospects

(MENAFN- Trend News Agency) BAKU, Azerbaijan, October 19. The holding of COP29 will open significant economic opportunities for Azerbaijan and create favorable conditions to unveil its rich potential in the field of green energy. This important event will act as a catalyst for economic growth, supporting the country's transition to a green economy and highlighting Azerbaijan's attractiveness for foreign investments. Furthermore, COP29 will enable close ties with international financial institutions to finance new projects related to the green transition.

International financial institutions are actively supporting Azerbaijan in its preparations for COP29, offering technical assistance and cooperation to successfully implement climate-related initiatives. The Asian Infrastructure Investment Bank (AIIB) aims to assist Azerbaijan in realizing its national agenda in line with COP29 objectives. The International Monetary Fund (IMF) is also ready to cooperate with the Azerbaijani government in preparing for COP29. "We have been working with Azerbaijan since the country gained independence on all reforms undertaken over the past 30 years. As an institution, we are ready to cooperate with Azerbaijan to ensure the success of this event. We conduct regular political consultations and provide technical assistance to Azerbaijan," noted the IMF Director for the Middle East and Central Asia Jihad Azour during the IMF Spring Meetings in Washington. The Asian Development Bank (ADB) has approved a technical assistance package for Azerbaijan in preparation for COP29. "This assistance will help the country build capacity for negotiations related to COP and organize the event itself. We look forward to discussing any further areas of cooperation," said ADB Director General for Central and West Asia Eugene Zhukov at the bank's annual meeting in Tbilisi.

The holding of COP29 will also facilitate the introduction of advanced technologies and the creation of new production capacities through foreign investments, which will serve as an important impetus for economic development. COP conferences bring significant economic benefits to host countries, contributing to revenue growth in sectors such as tourism, hospitality, and sustainable development.

Experience from previous conferences, such as COP15 in Copenhagen (2009), COP26 in Glasgow (2021), and COP27 in Sharm El-Sheikh (2022), confirms this trend. COP15, despite challenging negotiations, attracted significant attention to Copenhagen as an eco-friendly and sustainable city, boosting tourism and increasing investments in sustainable urban development projects. Denmark solidified its status as a world leader in renewable energy and climate technologies, subsequently attracting long-term investments in its green economy.

COP26, despite the COVID-19 pandemic restrictions, generated substantial revenue from tourism and the hospitality sector. Approximately 40,000 delegates attended in Glasgow, resulting in increased income for local businesses such as hotels, restaurants, and transport companies. The event also strengthened the city's reputation as a key player on the climate stage, further attracting investments to the region.

COP27 in Sharm El-Sheikh played a significant role in promoting Egypt as a global center for business tourism. The conference attracted not only tourists but also investments in green energy projects, helping Egypt strengthen its position in clean energy and sustainable development. The event stimulated tourism development and led to the creation of partnerships for energy project implementation.

South Australia's bid to host COP31 in 2026 also reflects these economic prospects: the state anticipates economic benefits of $500 million, expecting the conference to attract over 30,000 people, which will bring significant income to the local economy and open new opportunities for international climate cooperation.

Azerbaijan will be able to expand its relationships with leading countries in green energy and global financial centers, as the successful implementation of the energy transition and fulfillment of climate commitments is impossible without their support and capital. Given Azerbaijan's vast confirmed potential in alternative energy sources, it is strategically important for Baku to attract investments and open international financial channels.

Azerbaijan possesses significant untapped potential for renewable energy, including solar, wind, hydro, biomass, and geothermal energy. Although the country's energy policy has long focused on developing large oil and gas resources, significant changes have occurred in recent years. In early 2020, large-scale contracts were signed for the construction of wind and solar power plants, and in May 2021, parliament approved a law on the use of renewable energy for electricity generation. The adoption of this law opens new opportunities for Azerbaijan in developing green energy, creating a legal framework for project implementation in this area. The law provides for competitive tenders, support mechanisms for active consumers, and the development of additional regulations. Auction rules are currently in effect, and projects related to net metering and net billing are actively being developed. Additionally, laws regarding electricity and gas supply are under consideration.

Solar energy is one of the most promising areas for development in the country. According to the Ministry of Energy, the technical potential for solar energy in Azerbaijan is estimated at 23,000 MW. The number of sunny hours in Azerbaijan ranges from 2,400 to 3,200 hours per year, meeting international standards, with annual solar irradiation of 1,500 to 2,000 kWh/m2. The most favorable conditions for solar energy development exist in the valleys of central rivers, as well as in the north and northwest of the country.

Wind energy is also a promising direction. The Ministry of Energy estimates the technical potential for wind energy at about 3,000 MW, of which 800 MW are economically viable capacities. Realizing this potential could produce up to 2.4 TWh of electricity and save approximately 1 million tons of traditional fuel, significantly reducing CO2 emissions. Research conducted by the Azerbaijan Energy Research Institute in collaboration with the Japanese Tomen company showed that the average annual wind speed in Absheron ranges from 7.9 to 8.1 m/s. Overall, the average wind speed in the country reaches 6 m/s, confirming significant potential for wind energy development.

Hydropower remains the largest source of renewable energy in Azerbaijan, but its potential is also not fully utilized. According to the Ministry of Energy, the potential of small hydropower plants is 520 MW, which could produce up to 3.2 TWh of electricity annually.

In addition to financial assistance, the country will benefit from technology transfer from developed nations that are leaders in green energy. This technology transfer will not only help organize repairs and maintenance of high-tech equipment used in alternative energy but also lead to the establishment of joint ventures with foreign companies.

COP29 will contribute to deepening cooperation with leading countries and centers in the field of green energy, paving the way for the establishment of educational institutions and programs in Azerbaijan to train specialists in this area. This, in turn, will enhance the qualifications of local personnel and foster the creation of a professional base for implementing and developing innovative technologies.

The implementation of a green agenda, financial support, and technology transfer will lead to the emergence of local experts and the creation of new jobs, positively impacting the country's economy. The promotion of green energy will provide new opportunities for businesses of all sizes, contributing to cost optimization and increased profitability across various sectors of the economy.

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