BAKU — September 2, 2025.
Expanding renewable energy flows could help Azerbaijan emerge as a regional leader in the green energy transition, according to a new report by international ratings agency Moody’s.
The agency said growing cross-border electricity trade, stronger interconnectivity and ongoing reforms in the energy sector are opening new opportunities for investment in solar and wind power. These steps, it noted, will boost energy security while reducing social risks.
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Caspian Green Energy Corridor
Moody’s highlighted ongoing intergovernmental plans for a Caspian Green Energy Corridor, designed to link Azerbaijan, Kazakhstan and Uzbekistan in cross-border electricity trade. The corridor is expected to tap the vast wind potential in the north and solar resources in the south.
Parallel reforms in many countries aim to create competitive markets and attract private investment. In this context, Moody’s assessed that Azerbaijan and Uzbekistan are becoming regional frontrunners in renewable energy development.
Rising demand, structural limits
Energy demand in the South Caucasus and Central Asia is forecast to rise by 43% by 2030, reaching 134 million tons of oil equivalent compared to 94 million in 2020, according to data from the Asian Development Bank and government sources.
Despite rapid growth in consumption, hydrocarbons still account for around 75% of power generation across the region, limiting diversification. Moody’s noted that Armenia, for example, was forced to accelerate reforms and diversify energy supplies after relations with Russia, its main gas provider, deteriorated.
Strategic opportunity for Baku
Moody’s concluded that Azerbaijan, traditionally a hydrocarbon producer, is well positioned to leverage renewable investments to strengthen both domestic energy security and its role in regional power trade.
