Baku: Azerbaijan’s shift towards renewable energy sources is anticipated to drive economic growth and boost employment, a report by the World Bank reveals.

According to Azeri-Press News Agency, the report underscores the importance of accessible and affordable energy infrastructure as a foundation for job creation and economic transformation within the Europe and Central Asia (ECA) region. Unlike other regions, the ECA faces unique challenges, necessitating a tailored approach due to varying demographics, geographical locations, natural resources, political contexts, and initial conditions.

The World Bank identifies the South Caucasus as a potential energy corridor, highlighting Georgia’s hydropower capacity, Azerbaijan’s renewable energy initiatives, and Armenia’s solar energy potential as pivotal elements in fostering regional economic growth and employment. The report also addresses the coal phase-out in Central and Eastern Europe, emphasizing the need for transitioning workers to new sectors and increasing investments in renewable energy infrastructure to generate new employment opportunities.

In Central Asia, the growing population demands an expanded energy supply, with hydropower potential and solar resources taking precedence, while natural gas remains a transitional energy source in Kazakhstan and Turkmenistan. The World Bank also notes that nuclear energy could complement other sources in certain countries, ensuring that energy sector investments translate into productive employment.

The report projects Azerbaijan’s economic growth at 1.9% for the current year, with slight decreases to 1.8% in 2026 and 1.7% in 2027. These figures reflect a downward revision of the economic growth outlook by 0.6-0.7 percentage points compared to previous forecasts.