MILAN, Italy, May 6. The Asian Development Bank (ADB) and Azerbaijan will discuss new the partnership strategy and developing the project pipeline, Yevgeniy Zhukov, Director General of the Central and West Asia Department at ADB, said in an exclusive interview with Trend on the sidelines of the 58th Annual Meeting in Milan.
“We will meet with the Azerbaijani delegation here in Milan and have discussion on the upcoming country partnership strategy and also on developing of our project pipeline,” he said.
Zhukov noted that main pillars in the new strategy are green energy, connectivity and also in general working on diversification of the economy of Azerbaijan.
“A lot of economic activities have been concentrated in the
energy sector, especially
maybe in the fossil energy and the government wants to diversify
from that and we would like to help the government in this
undertaking,” he said.
Green energy cooperation
“We're trying to follow the government's own ambition, 30% by 2030. The government announced last year that they want the share of renewable energy in Azerbaijan to be increased to 30% by 2030. And when the government announced this goal, everybody was doubting that. But now the projections show that they probably will exceed this goal by that year,” he said.
Zhukov noted that in terms of the projects, one is the plant in Alat, which is already fully operational.
“And then we committed two projects last year, also in the solar projects. And this year, we are planning to commit one large project for the wind power. We are also discussing with the private sector possible projects in battery storage to make sure that the grid is stable. You would have seen what happened in Spain last week and we want to make sure that countries in the region avoid the situation. We already made similar investment in Georgia, which was signed earlier this week with the finance minister,” he noted.
Zhukov pointed out that the Trans-Caspian Green Corridor is another new initiative.
“This year we'll start pre-feasibility work. And if that pre-feasibility shows that this is a viable project, we'll do full feasibility and then we will move to preparing the project itself. We are also working with the government of Azerbaijan on introducing more environmentally friendly traffic situation in Baku. Azerbaijan requested assistance from us together with colleagues from the AIIB to expand the Baku metro system. So this is one specific initiative which we'll be also working with the AIIB on,” he said.
Overcoming bottlenecks in Middle Corridor
Zhukov noted that in addition to continuing the investment in infrastructure in a sustainable way, in the hard infrastructure, there is also a need to take care of the soft infrastructure.
“Because we have situations, maybe not necessarily along the
Middle Corridor, but in other corridors, when we build a road and
the trucks travel very fast, and then they spend a couple of weeks
at the border controls. So, we need to improve our soft
infrastructure and cooperation between countries in the region in
this area.
So, one example, which we are currently discussing in Georgia and
Azerbaijan, is creation of joint border crossing points in these
countries,” he said.
Zhukov pointed out that the name of the game is trying to make it as easy as possible, and to use digital technology and paperless work to make sure that the people and the roads travel fast in these regions without much impediments.
Issuing manat bonds
Zhukov recalled that ADB has been issuing manat bonds since 2021, and it plans to continue this.
“Our issues in manat bonds have been increasing in size, as you
would have seen from statistics, and we hope this trend continues.
We noticed that many countries in the region, especially
upper-middle-income countries, also
prefer to borrow from ADB now in the local currency, rather than US
dollars or Japanese yen or euros. So, when we do this kind of
bonds, we hope to contribute to development of the local currency
market, which would then allow us to satisfy the government's
request to provide such funding,” he explained.