Azerbaijan, Kazakhstan and Uzbekistan have taken a significant step to line up financing for an ambitious plan to export renewable-energy-produced electricity to Europe, signing a memorandum of understanding with the Asian Development Bank and Asian Infrastructure Investment Bank.

The MOU establishes a “robust institutional and legal framework to facilitate cross-border electricity trade,” according to a statement issued by the ADB. 

ADB Director General for Central and West Asia Yevgeniy Zhukov described the agreement as a “defining moment” for the development of a green energy corridor connecting Central Asia and the South Caucasus via a power line stretching under the Caspian Sea. The Caspian project is designed to link up with a similar initiative involving a power line across the Black Sea, enabling the export of electricity to the European Union.

“Our joint cooperation will enable us to start feasibility studies of the project soon. Thanks to this regional green energy initiative, Azerbaijan and Central Asia will realize the first trans-Caspian Energy Corridor,” the Azernews agency quoted Azerbaijani Energy Minister Parviz Shabazov as saying following the MOU signing ceremony in Baku on April 4.

Azerbaijan, Kazakhstan and Uzbekistan unveiled their trans-Caspian plan last May, under which electricity generated from renewable sources in Central Asia, mainly solar and wind, would be exported to Azerbaijan, which would relay the power onward to the EU. So far, no cost estimates or timelines for the completion of the project have been floated. 

Meanwhile, Azerbaijan, Turkey, Georgia and Bulgaria signed a MOU in early April and are presently engaged in “technical work” to prepare for a feasibility study for the Black Sea power cable project, according to an Azerbaijani media outlet. In March, Azerbaijan and Georgiarequested EU special status for the project that would expedite the regulatory approval process and make it easier for Black Sea consortium members to attract financing.