The year 2024 was a particularly remarkable year in Azerbaijan as the country hosted the 29th Conference of the Parties on Climate Change (COP 29) from November 11 to 22 in Baku. COP29 was the biggest international event in the entire region. Around 78 world leaders arrived Baku for climate talks, and more than 70,000 foreign and domestic representatives were registered for COP29.
It should be specifically emphasized that COP29 in Baku reached a breakthrough agreement that will triple finance to developing countries, from the previous goal of USD 100 billion annually to USD 300 billion annually by 2035. Moreover, COP29 opened new opportunities for Global Carbon Markets as the Parties reached consensus on standards for the creation of carbon credits under Article 6.4 of the Paris Agreement. This will enable climate action by increasing demand for carbon credits and ensure that the international carbon market operates with integrity under the supervision of the United Nations.
Another important achievement of COP29 was about the Loss and Damage Fund. At COP29, a decision was made to ensure the full operationalization of the Loss and Damage Fund, long-awaited by developing countries, including small island states, least developed countries, and African nations. With these achievements, the Loss and Damage Fund will be able to start financing projects beginning in 2025.
Infrastructure development and investment expansion
Despite challenges and a biased approach towards the country, Azerbaijan managed to overcome all the difficulties by successfully implementing socio-economic reforms and a green-growth strategy. Azerbaijan’s economic growth has accelerated and inflation has slowed. Public investment and real incomes have supported robust growth in non-oil growth domestic product (GDP), while the oil and gas sector has returned to growth on the back of strong natural gas demand.
2024 opened new opportunities for Azerbaijan to develop renewable energy sources as the country announced the year 2024 as the “Green World Solidarity Year”. The government collaborated with international financial institutions and companies to support renewable energy projects in the country. Important documents have been signed within COP29 between SOCAR Green LLC, the UAE Masdar company, the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB), and the Asian Infrastructure Investment Bank (AIIB) for the financing of two solar energy projects in Azerbaijan. The total cost of the Bilasuvar (445 MW) and Neftchala (315 MW) solar energy projects, being financed by EBRD, ADB, and AIIB, will amount to $670 million. The plants, commissioning of which is expected in 2027, are projected to generate more than 1.7 billion kilowatt-hours of green energy annually, saving 380 million cubic meters of natural gas per year and reducing carbon emissions by 830,000 tons.
It is worth noting that on May 1, 2024, Azerbaijan, Uzbekistan, and Kazakhstan also signed a Memorandum of Cooperation to connect the energy systems of these countries. This is an important step to support future green energy projects in the region and export vast green energy resources of Central Asian nations to Europe through Azerbaijan. Azerbaijan’s green energy strategy aims to transform the country into a ‘green energy hub’ in the region.
Regarding the export of natural gas, the country has also expanded the geography of its exports to Europe. Italy, Greece, Bulgaria, Romania, Hungary, Serbia, Slovenia, and Croatia bought the Azerbaijani natural gas in Europe. Additionally, Turkiye and Georgia were among the gas customers. Azerbaijan exported 11.7 bcm of natural gas to Europe in January-November of 2024.
On the background of EU-Azerbaijan’s strong energy partnership, the country also faced accusations of reexporting Russian gas to Europe. However, the Azerbaijani government and EU officials confirmed that only Azerbaijani gas was being exported to European markets via the Southern Gas Corridor. Tim McPhie, spokesperson for Climate Action and Energy at the European Commission noted that “The Southern Gas Corridor, which supplies the EU markets, is only connected to Azerbaijani gas fields, not to the broader Azerbaijani national gas system. So, the Southern Gas Corridor does not transport Russian gas to the EU”.
Restoration of Karabakh and Azerbaijan-Armenia peace talks
Following the liberation of the Karabakh region, Azerbaijan started post-war restoration and reconstruction works. The government funded various infrastructure projects in the liberated territories. So far, Azerbaijan directed AZN 17.5 billion (USD 10.3 billion) toward post-war restoration and reconstruction efforts. In 2024, the relevant budget allocation amounted to AZN 4.8 billion (USD 2.82 billion). From January to October of the last year, 64.4% percent of the budget allocations have been utilized to complete, accelerate, or initiate reconstruction projects. Moreover, extensive mine clearance operations have been conducted on 161,000 hectares (398,000 acres) since 2020, neutralizing over 160,000 explosives and unexploded ordnance.
According to the chairman of the board of the Economic Zones Development Agency (İZİA) of Azerbaijan Seymur Adigozalov “A total of 9 projects with a total investment volume of 68 million manat ($39.9 million) in Aghdam Industrial Park and 6 projects with a total investment volume of 42.7 million manats ($25.1 million) in Araz Valley Economic Zone Industrial Park were approved during the first half of 2024”.
Armenian-Azerbaijani peace talks continued in 2024, and recently, both parties preferred a bilateral format in peace talks. Azerbaijan and Armenia managed to complete the delimitation and demarcation of part of their borders through direct bilateral dialogue, which was a positive signal. President Ilham Aliyev also confirmed that the two sides have agreed on 15 of the 17 articles included in the draft peace agreement. However, the main obstacles to durable peace between parties remain the Armenian Constitution which contains a reference to the Declaration of Independence and the dissolution of the OSCE Minsk Group.
AZAL’s plane crash
Unfortunately, 2024 ended tragically as the Azerbaijan Airlines (AZAL) plane crashed near Aktau International Airport in Kazakhstan. The plane was subjected to “external interference” in Russia before being diverted across the Caspian Sea to Kazakhstan. As a result, 38 people died, including both of the pilots and a flight attendant, while 29 people survived with various injuries. On December 28, Russian President Vladimir Putin made a phone call to President Ilham Aliyev. During the phone conversation, Vladimir Putin expressed his apologies regarding the tragic incident involving an Azerbaijan Airlines passenger plane operating the Baku-Grozny route on December 25, which was subjected to external physical and technical interference in Russian airspace. On December 29, President Ilham Aliyev was interviewed by Azerbaijan Television at Heydar Aliyev International Airport, where he openly emphasized that the plane was shot down by Russia. President Aliyev talked about Azerbaijan’s demands and expectations from Russia.
Summing up, Azerbaijan continued its successful foreign policy in 2024 and supported the energy security of its partners. COP29 opened new opportunities for the country to speed up renewable energy projects, and consequently export green energy to Europe. With AZAL’s plane crash and faced challenges, the country pursued an independent and pragmatic foreign policy to protect national interests and security. In the end, it should be underlined that in the current geopolitical environment, Azerbaijan supports durable peace and regional cooperation in the South Caucasus.
AzVision.az
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