BAKU, Azerbaijan, January 12. The energy sector
will continue to play a central role in Azerbaijan’s economy in the
coming years, given its significant contribution to fiscal revenues
and export earnings, Anna Rose Bordon, head of the
International Monetary Fund (IMF) mission in the country, told
Trend.
She said that the global energy transition and declining demand
for fossil fuels pose challenges to the long-term sustainability of
hydrocarbon-dependent growth.
According to the mission head, in this context, economic
diversification remains critical.
"The government should continue to attract private investment by
pursuing key reforms such as improving state-owned enterprises'
performance, enhancing governance, and promoting private sector
access to finance," Bordon added.
Azerbaijan has outlined measures in its third Nationally
Determined Contribution (NDC) to decarbonize the electricity sector
by 2035.
Key measures include:
- Modernizing transmission and distribution networks to
accommodate rising demand and boost renewable energy
integration;
- Implementing advanced grid management tools to minimize
technical losses;
- Significantly increasing power generation from renewables,
with a primary focus on solar and onshore wind;
- Expanding installed solar capacity;
- Scaling up onshore wind power capacity.
Since the power sector mainly relies on natural gas, it
continues to be the country's biggest contributor to greenhouse gas
emissions, making up 21% of total emissions as of 2022.
A Nationally Determined Contribution (NDC) is a country's own
plan laid out under the Paris Agreement to cut down on greenhouse
gas emissions and adjust to the impacts of climate change, working
towards keeping global warming down to well below 2°C, ideally
1.5°C, in comparison to pre-industrial levels. These plans lay out
specific targets, policies, and measures for tackling and adapting
to climate change and need to be updated every five years with
rising ambition, making up the core of national climate action.
