MCDF supports AIIB’s collaboration with ADB on Caspian Green Energy Corridor Project

A USD1.05 million grant to help the Asian Infrastructure Investment Bank (AIIB) prepare the Caspian Green Energy Corridor project, in tandem with technical assistance (TA) from the Asian Development Bank (ADB), was approved by the Multilateral Cooperation Center for Development Finance (MCDF) Governing Committee during its meeting in Beijing on 23 June.

MCDF’s grant to AIIB, together with USD1 million TA from ADB, will jointly fund a project feasibility study, under separate contracts. It is MCDF’s first grant to support one of its Implementing Partners to co-finance project support with ADB.

The feasibility study will assess the technical, economic, financial, environmental, and social viability of the project’s proposed 400-kilometer high-voltage Azerbaijan-Kazakhstan submarine electricity cable across the Caspian Sea and associated transmission facilities further connecting with Uzbekistan.

The project aims to develop a cross-regional electricity transmission infrastructure to transport electricity, particularly renewable energy, from Central Asia to the South Caucasus via the Caspian Sea. It would in turn promote the creation of a Caspian green energy corridor that could enable Central Asian countries to export renewable energy to Europe.

The feasibility study will also assess regulatory frameworks and potential risks, facilitating informed decision making for subsequent project formulation stages.

The alignment of the study’s assessments with International Financial Institution standards and best practices will further open the door to potential project financing by AIIB and ADB.