Azerbaijan is entering an important phase of its economic transformation as renewable energy increasingly connects the country’s traditional energy expertise with new opportunities in manufacturing, technology and international trade. The expansion of solar and wind power, supported by international investment and infrastructure development, creates a foundation for a broader industrial strategy that can generate economic value across multiple sectors. The eighth edition of the EU Business Climate Report Azerbaijan 2025/26, prepared by the VM Europe consortium with European Union funding, highlights the progress achieved in the country’s renewable energy sector.
European businesses view the market as a promising destination for large-scale projects, with opportunities spanning engineering, infrastructure, logistics and consulting. These assessments underline the growing importance of renewable energy within Azerbaijan’s economic development agenda. The figures illustrate the scale of the opportunity.
Azerbaijan’s estimated technical renewable energy potential reaches 135 gigawatts onshore and 157 gigawatts offshore, while its estimated economically viable potential stands at approximately 27 GW. Solar power accounts for the largest share of this economically viable potential, followed by wind energy. These resources offer considerable scope for investment, industrial development and long-term energy production.
Azerbaijan aims to develop 8 GW of renewable energy capacity by 2032, while plans envisage integrating 2 GW into the national electricity system by 2027. The country also targets a 30% share for renewable sources in installed electricity generation capacity by 2030 and a 40% reduction in greenhouse gas emissions by 2035 compared with 1990 levels. Together, these objectives establish measurable milestones for the energy transition and provide investors with a clearer picture of the market’s direction.
International partnerships form a central part of this strategy. Projects involving Masdar, ACWA Power, BP, China Gezhouba Group Overseas Investment and SOCAR Green demonstrate the range of expertise and capital entering Azerbaijan’s renewable energy industry. Such cooperation can accelerate project delivery, strengthen technical capabilities and expand the participation of Azerbaijani companies in international energy value chains.
The next stage of development offers an opportunity to deepen the domestic economic benefits of these investments. Solar and wind farms require equipment, engineering services, electrical components, construction materials, maintenance and specialised technical expertise. Expanding local participation across these activities can create additional business opportunities for Azerbaijani manufacturers, small and medium-sized enterprises, technology providers and professional service companies.
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