Baku is once again at the center of global energy diplomacy as it hosts the latest meeting of the Advisory Council on the Southern Gas Corridor, with the participation of Azerbaijani President Ilham Aliyev. In his speech at the forum, President Aliyev delivered several key messages. Notably, he called for a reassessment of the international financial institutions’ policy of refusing to fund gas projects.
He reminded the audience that the Southern Gas Corridor is currently operating at full capacity, with the South Caucasus Pipeline, TANAP, and TAP as its three integral components. “They are running at full capacity, and we need to expand them,” he said, adding that this expansion will undoubtedly require funding. He continued: “Here we come to an important point. We have repeatedly stated that international financial institutions, which decided to suspend funding for fossil fuel-related projects, perhaps should reconsider this policy.”
This point warrants further clarification. The refusal to finance fossil fuel projects is part of the global “green agenda.” However, how logical or realistic is it? Cartoonish figures like Greta Thunberg may demand “an immediate and complete abandonment of fossil fuels,” but the reality is that the world cannot and will not be able to do so in the near future. Ilham Aliyev has stressed this many times. For instance, at the “COP29 and Green Vision for Azerbaijan” forum at ADA University, he stated: “Regarding green energy and fossil fuels, I believe the world will still need fossil fuels for many years. It would be naive to think that this will suddenly stop. The world is not ready for that. The global economy is not ready, and the industry is not ready either. So I believe the best path is synergy and evolution, not setting unattainable goals.”
President Aliyev also highlighted the financing structure of major energy projects, stating that in projects such as oil or gas pipelines, roughly 30% of funding comes from corporations, with the rest being credit-based.
Turning to the latest developments in the European energy market, Aliyev noted that Azerbaijan currently supplies natural gas to 12 countries, 10 of which are European, and eight of those are EU members. The number of countries interested in Azerbaijani gas continues to grow. There are many reasons for this. Firstly, due to Russia’s aggression against Ukraine, Moscow is effectively losing the European gas market, forcing Europe to seek alternative suppliers. This isn’t just about solidarity with Ukraine — pipelines that run through a war zone can’t be considered reliable.
In this context, the urgency of constructing various interconnectors becomes clear. But… who will finance them? It’s a situation reminiscent of the time when the “Nabucco” project was being discussed: everyone wants the gas, but no one wants to pay for the pipeline.
Aliyev stressed a key point at the Southern Gas Corridor Advisory Council meeting: Azerbaijan must be assured that its gas will be in demand in Europe for years to come. “If we don’t have that guarantee, then neither investors nor countries will commit funds. This will result in a major natural gas shortage. And we have known reserves. We expect production to begin at new fields,” he said. In other words, the gas market requires long-term contracts and commitments. Yes, Europe urgently needs increased gas supplies from Azerbaijan due to the war in Ukraine — but guarantees of sustained interest are essential.
Finally, there is one more often unspoken but very unpleasant reality: European politicians and EU bureaucrats are fond of shifting risks onto their partners — particularly when those partners are post-Soviet states that view cooperation through the lens of “European aspirations.” This is most visible in politics, where newly independent states are often left to bear all the risks and consequences of their “European choice.”
In Azerbaijan’s case, the issue may seem limited to finances. But one cannot entirely separate it from the broader context — such as the fighting in the Tovuz region in July 2020, or the question of whether it’s a coincidence that Armenia launched its “new war for new territories” in September 2020, just months before the Southern Gas Corridor went operational in December of that year. In any case, by securing victory in Karabakh, Azerbaijan also gained the ability to protect its export pipelines — using its own resources.
This background of EU relations with newly independent states gives Ilham Aliyev’s recent remarks a deeper significance. Europe can no longer pursue a policy of “oil and gas for Europe, political and financial risks for Azerbaijan.” Azerbaijan is not merely voicing its interests or setting conditions for energy cooperation — it is making it clear that it will no longer assume all financial risks just to be patted on the back by “the big guys” from the EU.
Ilham Aliyev has once again reminded the world that Azerbaijan must be addressed with respect and according to civilized rules. And by now, Azerbaijan has proven itself to be such a valuable and reliable partner that the EU bureaucracy can hardly afford to ignore this message.
Nurani
