Germany working to attract renewable energy companies to Azerbaijan

Germany working to attract renewable energy companies to Azerbaijan

The German-Azerbaijani Chamber of Commerce is working to attract German companies in the field of renewable energy sources to Azerbaijan, noted Executive Director of the German-Azerbaijani Chamber of Commerce (AHK Azerbaijan) Tobias Baumann, according to Azerbaijan in Focus, reporting Trend.

According to him, a delegation on renewable energy sources visited Azerbaijan in 2022.

“We have a program with the Ministry of Economy and Climate Action, and it supports business delegations on promising topics, such as the development of renewable energy sources in Azerbaijan. We know that Azerbaijan has a high potential in the field of renewable energy. We see a lot of interest in the German business community in this sector. Moreover, our Chamber of Commerce organized a Forum on Economic Sustainability and held meetings in the B2B format,” he said.

“Our companies are studying the Azerbaijani market, its conditions and legal environment. We have 2-3 projects that we are currently working on. The German side is negotiating with the Azerbaijani government to participate in renewable energy auctions. There are some aspects that need to be clarified, for example, the price. Azerbaijan has really low consumer electricity prices, which is not very attractive for large German investors. I believe that cooperation initiatives can come from medium-sized companies. There are also other possibilities that are being discussed today between German companies and the Azerbaijani side. If the auction takes place, I think there will be opportunities that will satisfy the interests of German bidders,” he added.

Moreover, according to Baumann, Germany expects to increase gas supplies from Azerbaijan, and cooperation between the State Oil Company of Azerbaijan (SOCAR) and Uniper has huge prospects in this matter.

“Uniper is one of the largest gas suppliers to our country, and cooperation with SOCAR is very valuable in terms of gas transportation from Azerbaijan via the Southern Gas Corridor to Germany. We should consider the need to increase gas supplies from Azerbaijan to Germany, as this is what we will need in the future. The document signed between Azerbaijan and the European Commission provides for doubling gas supplies from the Caspian region to Europe by 2027, and I think Germany will receive a good share of these supplies provided by Uniper,” Baumann said.

Baumann said that German companies are ready to support Azerbaijan in the production and export of green hydrogen.

“Thanks to long-term partnership and technologies, Germany can share its experience and is ready to become a consumer of green hydrogen from Azerbaijan. Everything related to technologies, productivity solutions – German companies have extensive experience in these areas, and accordingly we are considering expanding cooperation here. Our companies also specialize in the fields of agriculture, food production, and the development of eco-friendly solutions. At the moment we have projects with five farmers. Our technologies are expected to be delivered to them,” Baumann added.

Further speaking, Baumann also announced the launch dates of an energy gas turbine plant for the Azerkimya production association of the State Oil Company of Azerbaijan (SOCAR).

“It is expected that it will be put into operation by the end of August–beginning of September. Currently, this installation is being operated in test mode. The project will open up new directions for the development of similar projects in Azerbaijan for German manufacturers,” he said.

He also touched upon the development of economic relations and pointed out that Germany is interested in expanding cooperation with Azerbaijan in the sectors of renewable energy, mining and infrastructure.

“We see Azerbaijan as one of the main partners in the field of traditional energy production. I believe that Azerbaijan can play a big role in the world market in the field of renewable energy production, as well as hydrogen. The potential for the development of wind and solar energy in Azerbaijan will allow the country to become an exporter of green energy. At the same time, Azerbaijan could also export hydrogen or hydrogen electricity,” he said.

“Another area of cooperation could be the mining sector. This area is one of the future sectors of German interests. German manufacturers of equipment, technologies and techniques have extensive experience in the production of goods for this sector. In addition, we have considerable experience and qualified equipment that can also be used in the mining sector of Azerbaijan. It is also advisable to develop our cooperation in the field of infrastructure and water supply,” he added.

Meanwhile, Baumann noted that Germany plans to increase exports to Azerbaijan to more than $500 million by the end of 2023.

“The positive balance of foreign trade turnover between Azerbaijan and Germany in 2022 amounted to over $1.2 billion. Germany exported $472 million worth of goods to Azerbaijan, while imported $1.7 billion worth of goods. The largest volume of German imports from Azerbaijan fell on the products of the oil and gas sector,” he said.