Investments in Black Sea Energy corridor estimated at 22.1 bln euros
BAKU. Oct 26 (Interfax) - Total investments in the Caspian Sea-Black Sea-Europe green energy corridor project, Black Sea Energy, which entails exporting electricity generated from renewable sources in Azerbaijan to European markets via Georgia and the Black Sea, are estimated at 22.1 billion euros, the project company, Green Energy Corridor Power Company (GECO), posted in an investment presentation on its website.
"Investments in electricity transmission infrastructure are estimated at 14.3 billion euros, and the creation of renewable energy generation capacity is estimated at 7.8 billion euros," according to the document as based on a feasibility study conducted by Italy's CESI.
CESI estimates that the annual economic impact of the project will reach 860 million euros following the launch of the first line in 2032, 1.8 billion euros after the second line comes online in 2036, and will exceed 3 billion euros once the third line is launched in 2040. The figure for 2040 includes approximately 1.7 billion euros in economic benefits derived from the reduction of CO₂ emissions.
The project involves constructing three independent high-voltage direct current transmission lines, each with capacity of 1.3 GW. Total capacity of the corridor will increase in stages from 1.3 GW in 2032 to 2.6 GW in 2036, and then to 3.9 GW in 2040.
The first stage entails the creation of a 3,040 km-long line following the Baku-Ksani-Anaklia-Constanta Sud-Albertirsa, Hungary route scheduled for commission in 2032. Capacity of the section between Romania and Hungary will be 2 GW.
The second stage involves the construction of a 2,340 km-long line along the Baku-Tskaltubo-Poti-Constanta Sud-Domnesti, Romania route scheduled for commission in 2036. The third line from Baku through Tskaltubo and Poti to Constanta Sud, Romania and spanning 2,020 km is slated for launch in 2040.
The subsea cable crossing the Black Sea will be approximately 1,120 km long, reaching a maximum depth of 2,200 meters, for each line.
According to CESI's projections, electricity exports from renewable sources to the European Union could reach 8 billion kWh per year starting in 2032, rising to 20 billion kWh by 2040.
The project's resource base will comprise Azerbaijan's offshore wind energy potential in the Caspian Sea, estimated at approximately 25 GW, equivalent to annual output of about 96 billion kWh. Around 19 GW of solar and onshore wind capacity will serve as an additional source.
Implementing the project should reduce carbon dioxide emissions by approximately 1.7 million tonnes per year from 2032 and by 3.6 million tonnes annually by 2040.
The project is currently in the development phase, which includes the preparation of tender documentation and a roadmap for reaching a final investment decision. GECO has announced a call for expressions of interest from strategic partners and potential investors.
A hybrid-financing model, incorporating both public and private capital, is being considered for the project. Each 1.3 GW line is structured to include a 500 MW regulated segment and an 800 MW commercial segment.
The financial model envisages securing long-term loans from international financial institutions, export credit agencies, and commercial banks, as well as grants from the European Union under the Connecting Europe Facility mechanism. The calculations incorporate EU grant funding totaling 25% of capital expenditures. However, actual receipt of the funds has not yet been confirmed.
The governments of Azerbaijan, Georgia, Romania, and Hungary in July 2026 completed and approved the feasibility study for the energy corridor.
The power grid operators of the four countries have established the GECO project company, with Azerbaijan's Azerenerji, Georgia's Georgian State Electrosystem, Romania's Transelectrica, and Hungary's MVM each holding a 25% stake in the capital.
The four countries on December 17, 2022, signed an agreement on a strategic partnership to develop and transmit green energy.
