MCDF Grant Propels Concept Development for Large-Scale Offshore Wind Farm and Clean Energy Transmission Opportunities in Caspian Sea

A USD105,000 pre-concept paper support grant to develop proposals for a large-scale offshore wind farm and clean energy transmission opportunities in the Caspian Sea was approved by the Multilateral Cooperation Center for Development Finance (MCDF) Governing Committee during its meeting in Beijing on 23 June. The pre-concept paper support will be implemented by the Asian Infrastructure Investment Bank (AIIB) and the Government of Azerbaijan.

The MCDF grant will fund a concept development study for potential Azerbaijan coastal infrastructure needed to deploy the Caspian Sea wind farm. The study will assess the project’s scope, preliminary technical feasibility, and cost, helping to ensure that associated port and grid development is resilient, addresses climate imperatives, and financially viable, in line with International Financial Institution standards.

The MCDF grant’s early technical assistance for realizing the Caspian Sea wind farm will help build Azerbaijan’s capacity to both seamlessly integrate offshore wind energy into its power grid and export it.

It will further enable Azerbaijan to develop into a regional renewable energy trading hub, contributing to the formation of a broader Central Asia-European Union (EU) Green Energy Corridor. This will support the transmission of renewable energy from Central Asia to the EU via a proposed Caspian Sea and Black Sea submarine electricity cable.

The Azerbaijan Renewable Energy Agency (AREA), under the Ministry of Energy (MoE), will implement the MCDF-funded concept study, following AIIB’s procurement policy and supervised by AIIB. It is the first time AIIB is implementing a technical assistance project using this approach, with the outcomes expected to inform comparable future initiatives.