On April 4, 20250, Baku hosted the latest meeting of the Southern Gas Corridor (SGC) Advisory Council, with the participation of the President of the Republic of Azerbaijan, Ilham Aliyev. The event once again highlighted Azerbaijan’s role as a key actor in global energy diplomacy. Central to the forum were issues of both regional and global significance: the stability of energy supply, infrastructure development prospects, challenges posed by decarbonization policies, and the impact of current geopolitical tensions.
In his address, President Aliyev outlined several core positions regarding the role of natural gas in the global energy system. Particular attention was given to the limitations placed on access to finance by international financial institutions due to their recent shift away from supporting fossil fuel-related projects. The president called for a reassessment of this policy, stressing that the Southern Gas Corridor — a major infrastructure project comprising the South Caucasus Pipeline, the Trans-Anatolian Natural Gas Pipeline (TANAP), and the Trans Adriatic Pipeline (TAP) — is currently operating at full capacity. Given the rising demand for gas and evolving dynamics in the energy sector, there is now a clear need to expand the corridor, which will require significant investment.
This position reflects a broader debate about the balance in global energy policy. One of the main arguments voiced by President Aliyev was that a complete and immediate transition away from fossil fuels is unrealistic under current conditions. While the global community is striving to meet emissions reduction targets, much of the world’s energy demand continues to be met by traditional sources. Aliyev argued that a gradual, evolutionary transition toward green energy — one that builds synergy between existing and renewable sources — is more viable than setting unachievable targets and abandoning functioning infrastructure.
The president also addressed the financing mechanisms for large-scale energy projects. Drawing from Azerbaijan’s experience, he noted that around 30% of the funding for such projects typically comes from corporate investors, with the remainder being sourced from loans and credit institutions. In this context, the exclusion of fossil fuels from the portfolios of international lenders creates substantial risks for new energy developments — risks that affect both supplier and consumer countries. This situation could undermine energy market stability, especially in light of ongoing geopolitical disruptions.
Currently, Azerbaijan exports natural gas to 12 countries, 10 of which are in Europe, including eight European Union member states. Interest in Azerbaijani gas continues to grow. One of the main reasons for this trend is the ongoing transformation of the European energy market amid the war in Ukraine, which has forced the EU to urgently diversify its sources. With Russian supply routes increasingly unreliable, alternative options — particularly Azerbaijani exports — have gained strategic importance.
However, infrastructure expansion requires more than financing; it also demands long-term strategic clarity. President Aliyev emphasized the importance of long-term contracts and commitments that would ensure continued demand for Azerbaijani gas in the coming years. Without such guarantees, neither governments nor private investors will be willing to assume the financial risks associated with new energy projects.
This leads to a broader question about the institutional approach of the European Union toward its external partners. Azerbaijan has repeatedly underscored that it assumes a disproportionate share of the political and financial risks associated with joint energy initiatives. This imbalance was also evident in previous projects, such as the ultimately abandoned Nabucco pipeline. There is a clear structural asymmetry: while the demand for gas is strong, European readiness to invest in essential infrastructure remains limited.
Beyond these financial and technical issues lies a wider context. The Azerbaijani government has stressed the need to guarantee the security of its energy infrastructure. One relevant example is the conflict in the Tovuz region in July 2020, followed by the escalation in Karabakh just months before the SGC became operational in December of the same year. Following its victory in the Second Karabakh War, Azerbaijan was able to secure the safety of its export pipelines using its own resources — an important factor in evaluating the reliability of Azerbaijan as an energy partner.
President Aliyev’s address at the SGC Advisory Council thus serves as a call for a reassessment of international energy policy and investment practices. It highlights Azerbaijan’s crucial role in Europe’s energy security architecture. At a time of global uncertainty, complex energy transitions, and increased politicization of energy issues, Azerbaijan is positioning itself as a stable, responsible, and strategically valuable partner. Its approach emphasizes fair dialogue, shared benefits, and a more balanced distribution of risks — key principles shaping the country’s external energy policy today.
