Vice president: WB ready to support private capital participation in Azerbaijan's infrastructure projects - INTERVIEW

Against the backdrop of the global transformation of logistics routes, Azerbaijan is strengthening its position as a central element of the Middle Corridor, connecting Central Asian economies with European markets. The effectiveness of this transport route is determined not only by the modernization of port and rail infrastructure but also by the digitalization of border procedures, the organization of seamless logistics, and the development of a sustainable energy base. The World Bank Group is assuming the role of a strategic partner in this large-scale process, assisting the region in developing common standards and attracting private capital to key infrastructure.

In an exclusive interview with Report on the sidelines of the 13th session of the World Urban Forum (WUF13), Valérie Levkov, Vice President for Infrastructure at the World Bank Group, discussed the comprehensive development of the Middle Corridor, the modernization of the power grid infrastructure to incorporate green generation, the future of the Black Sea undersea power cable megaproject, and public-private partnership tools.

Report presents the interview:

- The World Bank views the Middle Corridor's potential as strategically significant for the entire region. Which specific infrastructure nodes in Azerbaijan's transport system does the World Bank identify as priorities for modernization-port facilities, railway lines, or logistics centers?

- My answer will be crystal clear. Everything needs to be developed. And we are working on infrastructure comprehensively, including areas that sometimes involve strengthening the energy sector and developing the secondary road network. Therefore, we strive to approach the development of the corridor holistically and coherently, encompassing, as you understand, both the economic dimension of transport routes and the simplification of trade procedures.

In other words, we are not talking exclusively about hard (physical) infrastructure, but also about the entire set of factors that ensure its more effective functioning.

- You have repeatedly emphasized the fundamental importance of a regional approach and uniform standards for achieving the goals of the Middle Corridor. How does the World Bank facilitate coordination between Azerbaijan, Georgia, and the Central Asian states to build seamless logistics?

- Yes, we advocate interregional dialogue. We bring leaders and decision-makers together at the negotiating table, striving to harmonize and standardize processes. This is precisely what we can achieve – bringing together all participants to discuss key stages and existing challenges in order to develop joint solutions. We employ this practice on a number of major regional corridors, and the Middle Corridor is one of the leading ones.

- Azerbaijan has identified ambitious renewable energy targets - solar and wind power plants. What role is the World Bank prepared to play in upgrading the country's power grid infrastructure so that it can seamlessly absorb significant volumes of intermittent green generation?

- Yes, this is a crucial issue. We are working with the Ministry of Energy, providing assistance to ensure the resilience and enhancement of the power grid. I would note that this topic is currently on the global agenda, as the grid is increasingly becoming a vulnerable link in the electricity system.

In this regard, we are currently negotiating with the Ministry of Energy for technical assistance, with the aim of subsequently engaging the private sector in addressing this issue.

- How do you assess the technical and financial viability of the deep-sea cable project under the Black Sea to transport green energy from Azerbaijan to the EU? Is the World Bank prepared to participate in financing such megaprojects?

- We are capable of co-financing projects of this scale. The initial step is always the preparation of a feasibility study by our advisory unit. Then, once the economic feasibility of such a large project is confirmed, we can move on to the next stage – direct financing.

In this case, we also seek to engage the private sector to reduce the financial burden on the state and sovereign debt, and possibly utilize a public-private partnership format. Therefore, assisting in mobilizing private capital support is also within the capabilities of the World Bank Group.