Energy dependence has reached a level where even major powers can become strategically vulnerable. This dynamic is clearly illustrated by the gas trade between Europe and Russia. In 2019, prior to the outbreak of the war in Ukraine, Europe imported approximately 175 bcm of Russian gas. After the war began in 2022, imports declined sharply to around 75 bcm. Despite this significant reduction, Europe was unable to fully eliminate its dependence, as a substantial portion of its energy demand continued to be met by Russian supplies.
As the war enters its fifth year, European institutions have announced plans to phase out remaining Russian gas imports. This trajectory underscores the importance of diversification in energy policy.
In this context, the South Caucasus has gained greater strategic attention. Azerbaijan, whose economy has historically been centered on oil and gas production and exports, has increasingly emphasized diversification, both in export destinations and in energy sources. Alongside continued hydrocarbon exports, the country has expanded its focus on renewable energy development.
Currently, Azerbaijan exports natural gas to 16 countries, 10 of which are European Union member states. At the same time, renewable energy initiatives are advancing. One of the most significant among them is the Black Sea Submarine Cable Project. The institutional framework for this initiative has gradually taken shape. In May 2024, the energy operators of Azerbaijan, Romania, Georgia, and Hungary signed a memorandum of understanding to establish a joint venture for the Black Sea Energy Project. This was followed in September by a shareholder agreement between Azerenerji JSC, Transelectrica SA, Georgian State Electrosystem, and MVM Energy to formally establish the Green Energy Corridor joint venture, which will be responsible for implementing the project. These developments indicate a structured, multilateral approach to the corridor’s realization.
To better understand the broader implications of the project, AzerNEWS spoke with Tinatin Japaridze, Director of Geopolitics at Anadyr Horizon, a venture-backed predictive intelligence firm specialising in simulation-based geopolitical and market risk analysis. She previously led South Caucasus coverage at Eurasia Group.
According to Japaridze, the Black Sea submarine cable represents not only an energy initiative but also strategic infrastructure. At approximately 1,195 kilometers, the high-voltage subsea cable is designed to transmit up to 1,000 MW of renewable electricity from Azerbaijan and Georgia to Romania, onward to Hungary, and ultimately into the wider European Union grid.
From a benefits perspective, the project could contribute to supply diversification and renewable integration within Europe. For Azerbaijan and Georgia, it may create expanded access to European electricity markets and support the development of renewable energy sectors. Georgia could potentially strengthen its role as a transit country, while Azerbaijan is seeking to complement its hydrocarbon exports with renewable energy exports.
However, the project also faces considerable challenges.
Technically, it would be among the longest and deepest subsea power cables constructed to date, requiring specialized manufacturing and installation capabilities. Onshore grid infrastructure, particularly in Georgia, would require upgrades to accommodate variable renewable flows at scale.
In comparative terms, the longest existing cable with similar capacity is the North Sea Link, a 750-kilometer interconnector between Norway and the United Kingdom. The Black Sea project would exceed this length.
From a regulatory perspective, alignment between EU and non-EU frameworks will be necessary. This includes harmonization of permitting procedures, grid codes, and cross-border electricity trading rules, which requires sustained political coordination.
Geopolitically, the Black Sea region presents a complex operating environment. Heightened regional tensions and militarization increase infrastructure-related risks. Subsea cables, as critical infrastructure, may be exposed to security vulnerabilities.
Japaridze also noted that domestic political developments in Georgia and its relationship with Brussels may influence investor perceptions. As a transit country, regulatory alignment with EU standards is particularly relevant for market integration and financing considerations. She further observed that the broader regional balance of influence is shifting as Europe develops alternative energy corridors, which may alter geopolitical dynamics in ways that affect infrastructure risk assessments. Overall, the project’s viability depends on the simultaneous management of engineering, regulatory, financial, and geopolitical factors, with long-term institutional coordination being central to its implementation.
As Azerbaijan expands its green energy production, the key question whether there is sufficient market demand in Europe to support this growth remains outstanding.
In this context, Azerbaijan has announced plans to add 8 GW of energy capacity by 2032, reflecting an effort to diversify its energy mix and expand its renewable portfolio, which could enhance prospects for supplying Europe with renewable energy.
In Japaridze’s assessment, European participation appears plausible, as the project aligns with EU objectives related to diversification and decarbonization.
“Romania and Hungary are already directly involved in the governance structure, which may facilitate access to EU funding mechanisms. At the same time, Azerbaijan’s ability to export renewable electricity to Europe depends on two main factors: sufficient generation capacity and effective market integration. While wind and solar projects are currently under development, larger-scale deployment will be required to sustain exports. In addition, regulatory alignment, transparent trading mechanisms, and competitive pricing structures will be essential for successful integration into European electricity markets.”
European electricity demand is projected to increase significantly in the coming decades, reinforcing the relevance of long-term infrastructure planning. Domestically, Azerbaijan produced 28.4 billion kWh of electricity in 2024, of which 24.1 billion kWh met domestic demand and 1.4 billion kWh were exported. Imports totaled 70.7 million kWh. In the first nine months of 2025, production reached 21.8 billion kWh, with exports of 989.6 million kWh and imports of 145 million kWh.
Renewable energy has begun to contribute more visibly to growth dynamics. The 230 MW Garadagh Solar Power Plant significantly increased solar generation following its commissioning. Additionally, the 1,880 MW ‘8 November’ Power Plant expanded overall generation capacity.
After considering these factors, the question arises whether public-private partnerships could accelerate the project and which models have proven effective in similar cross-border energy initiatives.
According to Japaridze, public-private partnerships (PPPs) can play a critical facilitating role in infrastructure projects of this scale.
“The joint venture structure, involving transmission operators and governments from Azerbaijan, Georgia, Romania, and Hungary, reflects a coordinated approach that integrates both public authorities and corporate stakeholders,” the expert commented.
She also noted that experience from cross-border infrastructure projects in Europe indicates that PPPs are most effective when revenue models are clearly defined, risk allocation is transparent, and regulatory frameworks are stable and predictable.
‘EU-backed infrastructure corridors have also demonstrated how public funding can de-risk early stages and crowd in private capital. For this project, EU designation and financial instruments materially improve its attractiveness to strategic investors, provided regulatory clarity follows, and also stability and security in the South Caucasus region is sustained, which is extremely important,’ Japaridze added.
Supporting the project, the World Bank approved a $35 million loan under the Electricity and Renewable Energy Sources Program (ESPIRE) to finance the initial phase. This includes identifying the optimal corridor and conducting geophysical and geotechnical surveys of the Black Sea seabed.
The corridor is scheduled to become operational by 2032, with an initial export capacity of up to 4 GW, to be implemented in phased stages. Electricity will be generated primarily from offshore wind farms in the Azerbaijani sector of the Caspian Sea, transmitted to Georgia via a High-Voltage Direct Current (HVDC) link, and subsequently delivered to Romania and Hungary through the subsea cable. In 2023, Bulgaria expressed interest in joining the project, highlighting broader regional engagement in this initiative. Italy is also reportedly considering joining the project.
Following other countries’ expressed interest in joining the project, it is essential to address the regulatory and legal hurdles necessary to ensure smooth operations and effective cross-border energy trading.
Japaridze emphasized that multiple layers of regulation must be harmonized for the project to function effectively.
“The subsea cable must comply with EU energy market rules, including grid codes, transparency requirements, and market operation standards. Cross-border electricity trading will require harmonized settlement systems, balancing mechanisms, and compatible trading platforms to enable efficient integration of power from non-EU producers into European markets,” she said.
The expert also pointed out that interconnection agreements between grid operators must clearly define procedures for congestion management, cost allocation, and dispute resolution. In addition, environmental permitting and maritime law compliance represent critical considerations, given the sensitivities associated with subsea construction.
‘Addressing these regulatory and legal requirements early, while ensuring robust investor protections, will be essential for integrating the corridor into broader European energy markets,’ Japaridze noted.
It should be noted that the project achieved a significant milestone in December 2025, when it was granted the status of a European Project of Mutual Interest, reflecting its strategic relevance for the EU energy landscape.
It seems that the two Caucasian countries, Azerbaijan and Georgia, are positioning themselves to export green energy in a manner similar to their oil and gas exports.
Japaridze highlighted that Azerbaijan and Georgia have a strong history of cooperation in large-scale energy infrastructure, demonstrating political will, strategic alignment, and institutional capability.
‘There are clear reasons to believe this cooperation can extend into renewable energy. Institutional momentum is already visible through the joint venture managing the Black Sea cable, and EU involvement provides a stronger external anchor than previous projects had. Both countries share a clear economic interest in expanding export access,’ she explained.
The expert also clarified the situation by highlighting the differences between the two types of energy.
“At the same time, renewables introduce new technical and market complexities that oil and gas infrastructure did not face, including intermittency, grid balancing, and evolving market structures. Successfully replicating past infrastructure achievements will require investment not only in generation capacity, but also in modernized transmission networks, regulatory alignment, and sophisticated electricity trading frameworks,” she elaborated.
‘Clean electricity is a systems challenge, not just a production challenge,’ Japaridze emphasized. ‘This corridor is about far more than power flows. It reshapes geopolitical and geoeconomic dependencies, redistributes influence, and embeds the South Caucasus more deeply into Europe’s energy future. Every new corridor reduces one dependency, and creates another,’ Japaridze said in conclusion.