ADB interested in further supporting Caspian Green Energy Corridor Project - Lyaziza Sabyrova (Exclusive interview)

MILAN, Italy, May 8. The Asian Development Bank (ADB) interested in further supporting Caspian Green Energy Corridor Project if it proves commercially viable, Lyaziza Sabyrova, Regional Head, Regional Cooperation and Integration, Central and West Asia Department at ADB, said in an exclusive interview with Trend on the sidelines of the 58th Annual Meeting in Milan.

“It started with a request from Azerbaijani government last year to help support three countries, namely Azerbaijan, Kazakhstan, and Uzbekistan, which already started themselves this work. We responded very quickly under CAREC program and we found grant financing to prepare feasibility study. We also looked for mobilization of other grant funds and got it also from Asian Infrastructure Investment Bank,”
she said.

Sabyrova noted that now work is underway for the pre-feasibility study of this project.

“In April, we signed a memorandum of understanding in Baku with three ministries of energy, plus ADB, plus AIIB, on the start of this feasibility study. It will have two phases. The first phase of the feasibility study is a very critical first step in assessing technical, economic, and regulatory viability of potential interconnection between South Caucasus and Central Asia. It is a huge, very important and very transformational project,” she said.

Sabyrova expressed confidence that the investments required for that will be huge.

“I think there will be room for other international financial institutions and private sector to participate in investing in this project. But surely, if the feasibility study shows that the project is commercially viable, ADB would be very much interested in investing into this project,”
she noted.

Talking about other green energy projects, Sabyrova said ADB has approved several energy-related projects in Azerbaijan, including the Banka, Bilasuvar and Alat solar power projects.

“And in the past, ADB approved two loans for power transmission and distribution projects for $160 and $250 million. In addition, we provided slightly more than $1 million technical assistance grant for heat and sector decarbonization project,” she said.

Middle Corridor Strategy

“Under the CAREC program, we are now developing a strategy for the Middle Corridor, and we are looking at not just investments in roads or railways, but on the soft side also. We plan to complete the preparation of the strategy this year.

In June, we have senior officials’ meeting of the CAREC program in Issyk-Kul, Kyrgyz Republic. We plan to discuss it and to present the study to national focal points there and get their feedback. And we plan to finalize that strategy for the Middle Corridor this year,” she said.

Sabyrova noted that the ADB transport team is now doing a mid-term review of the overall CAREC transport strategy by 2030.

“We are taking a fresh look at whether the strategy is still relevant or to adjust it a little bit. The previous CAREC transport strategy had several priorities. One of them was connectivity, focusing on roads, railways, and so on. Another direction was on road safety. It's very important in our CAREC region to make roads and transport safer place. Of course, we know that in many CAREC countries, including in South Caucasus, road safety is an issue sometimes. Another direction of the strategy was to pay attention to maintenance of road assets, which is also a very important part. That was the current strategy and now our team is looking at whether this strategy needs some adjustments,” she said.

As for the Middle Corridor strategy development, Sabyrova said ADB is looking at the list of key bottlenecks where problems are, because this corridor is multi-modal.

“Another element of the strategy is to look at technical regulations, at soft side, to harmonize procedures. All the transit procedures, clearance, customs procedures need to be made smoother for all countries along the corridor, especially for the transit traffic from, let's say, People's Republic of China all the way to Europe. We prepare the Middle Corridor strategy in coordination with countries involved. Recently in Baku, we had a consultation with Ministry of Transport and other relevant agencies in Azerbaijan, on the development of this Middle Corridor strategy,” she said.

Sabyrova pointed out that ADB is doing it consultatively, including also with development partners, because now everybody is working on the Middle Corridor - World Bank, OECD, European Commission, and so on. “So we coordinate with them as well.”

Cooperation in digitalization

Sabyrova noted in that under CAREC program digitalization is a cross-cutting theme.

“We try to look at digitalization and put it through everything that we do. In February this year, Azerbaijani government asked ADB to support implementation of the Baku Metro expansion project and it's a part of the state program from 2025 to 2030 on improving transport infrastructure in the city of Baku and the surrounding areas. We reacted in ADB quite quickly and have approved already a technical assistance to help preparation of the Baku metro expansion project. It includes several stations, about 20 kilometers of tunnels, installation of signaling and other systems. As part of this project, we are also developing a digital transformation component as an important part of the Baku Metro expansion project", she said.

In addition to that, Sabyrova also mentioned the CAREC Digital Strategy 2030.

“Azerbaijan has so much experience in this already to share with our CAREC countries. For example, you have ASAN system. We tell other countries in CAREC about this experience of Azerbaijan. Our countries found it very useful and very interesting experience. And under our CAREC Digital Strategy, we are also helping our countries to establish ecosystem for startups. We also communicated with Sabah Hub Innovation Center in Azerbaijan,” she said.

Overview of cooperation with Azerbaijan under CAREC program

She recalled that it has been 24 years of the CAREC program overall.

“We invested $52.4 billion for all CAREC countries and out of that amount, $7.1 billion was invested in Azerbaijan. But it's not just ADB, but also funding from other development partners, from the government of Azerbaijan for regional projects under CAREC program. Most of it went to transport sector in Azerbaijan. In 2024, we approved two CAREC-related projects: one for railway sector program of more than $130 million which financed the upgrading of a section of designated CAREC railway corridor 6, and another for the Azerbaijan Railway Digital Transformation Project (a $47 million loan),” she said.

Sabyrova pointed out that ADB prioritizes full utilization of opportunities from transit transport in Azerbaijan in its operations for this year.

“Azerbaijan is a key player in the CAREC Corridor 2, also known as the Middle Corridor. Because of geographical location, of course Azerbaijan plays a crucial role in connecting trade and economic activities between People's Republic of China and Europe through the Middle Corridor, through Central Asia and Caucasus,” she added.

Cooperation with Central Asian countries

Starting with Tajikistan, Sabyrova said ADB has quite a robust program for the next four years in the areas of climate resilient water resources, digital agriculture, energy transport, urban development, and social sectors and in some other areas.

“ADB is developing a new country partnership strategy for Tajikistan. Talking about Tajikistan, we must mention Rogun, a large hydro project, and ADB is also participating in its financing in coordination with World Bank, who is leading the work, and many other development partners. That's another example of a significant and transformative renewable project,” she said.

As for Uzbekistan, Sabyrova pointed out that it is a country with its very dynamic economy.

“For the next few years, we have a very strong pipeline of projects in various sectors, very diversified program. We support agriculture and natural resources and rural development. We have projects in energy finance, public sector management, human and social development, transport and water resources and other urban infrastructure. We also try to make these ADB projects in the country well-balanced to include policy-based loans, supporting government reform agenda, and project financing” she said.

When talking about the collaboration with Turkmenistan. Sabyrova noted that in terms of the volume of ADB lending and number of projects, the cooperation with Turkmenistan is at the early stages.

“It's quite modest and we are now discussing new projects in line with the country partnership strategy which was approved quite recently. We are also talking about both urban solar power projects and water solutions. We are looking on a technical assistance under the Clean Energy Financing Partnership Facility for the development of solar projects. If it works out, it will be first of its kind technology in Turkmenistan and will have quite sizable impact for promotion of renewables,” she said.

Sabyrova noted that ADB is also working on evaluation of wind potential for renewable energy development in this country.

“We try to support Turkmenistan in diversification of the energy mix. Right now we work on projects in connectivity. Also there is some preparatory work in the health sector. So we are trying to expand our program in Turkmenistan. I think the potential for regional projects especially under CAREC Program, is huge. We need to work with government to develop this further,” she said.

Further, talking about Kazakhstan, Sabyrova noted a robust cooperation with this country.

“Kazakhstan is one of the upper-middle-income countries in the region with quite dynamic economy and we have very robust cooperation. Last year, we marked a 30-year partnership with Kazakhstan,” she said.

Sabyrova recalled that last July ADB and Kazakhstan Electricity Grid Operating Company (KEGOC) signed a financing deal for about $123 million to expand the high-voltage transmission network in the southern region of Kazakhstan.

“We hope that the project will be completed fairly soon, by 2027. This expansion will allow integration of large-scale renewable power generation into the grid, and to reinforce and stabilize power transmission in the south of the country, improve Kazakhstan’s energy security. The financing will support the construction of 500 kV overhead transmission lines and the reconstruction and renovation of the Shu, Jambul and Shymkent 500 kV substations.

These enhancements are expected to increase transmission capacity by 75%, a very sizable amount and improve the stability of energy supplies by eliminating overloading and reducing transmission losses,” she concluded.