Azerbaijan is advancing towards a new stage in its energy development, combining its established position as an oil and natural gas supplier with an ambitious renewable energy programme. The country plans to complete 11 power plants with approximately 2 gigawatts (GW) of combined capacity by the end of 2027, supported by an estimated $2.6 billion in investment. This programme represents a significant opportunity to expand electricity production, improve resource efficiency and establish additional sources of long-term economic growth.
Energy Minister Parviz Shahbazov announced that private investment would exceed $2 billion, while state investment would surpass $600 million. Private capital therefore represents approximately 77% of the projected funding, highlighting the growing role of international investors and domestic businesses in Azerbaijan’s energy transformation. The programme also establishes a foundation for a much larger expansion.
Azerbaijan aims to develop approximately 8 GW of solar and wind power capacity by 2032, while nearly 20 large-scale renewable energy projects are progressing with international and local partners. These targets position the country to develop a more diversified electricity system and strengthen its regional energy partnerships. Source The economic significance of renewable energy extends well beyond the construction of solar panels and wind turbines.
Azerbaijan possesses substantial natural gas resources, making the relationship between renewable electricity and gas consumption particularly important. In 2024, the Energy Ministry outlined expected benefits from approximately 2 GW of renewable energy capacity, including annual electricity generation of 5.3 billion kilowatt-hours and potential natural gas savings of 1.2 billion cubic metres. These projections illustrate the economic value of incorporating renewable generation into the national energy system.
Every cubic metre of natural gas saved through renewable electricity generation creates additional flexibility for the economy. Depending on domestic demand, production capacity and export infrastructure, these resources can support industrial activity, domestic energy security and international gas deliveries. Azerbaijan can consequently develop renewable electricity as a strategic complement to its established hydrocarbon industry.
This approach creates opportunities for two interconnected energy businesses: natural gas exports and electricity production. Together, they can support public revenues, attract investment and strengthen Azerbaijan’s position in regional energy markets. The participation of major international energy companies demonstrates the scale of commercial interest in Azerbaijan’s renewable resources.
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