Azerbaijan, which has been delivering gas to Europe through the Southern Gas Corridor since 2020, has big potential to increase its deliveries, Ambassador of Germany to Azerbaijan Ralf Horlemann told Trend in an exclusive interview.
“Energy has become a very critical and important issue ever since Russia invaded Ukraine and started to misuse energy as a weapon. Europe had to react and reorganize its energy import policy. We had to substitute for the Russian pipeline gas and started to increase imports from other sources. Now, there are a number of providers that are providing more gas to the EU than they did in the past,” he noted.
According to the ambassador, Germany sees great potential in energy cooperation with Azerbaijan.
“This would be perfectly in the interest of the EU to diversify its energy imports. In a couple of years, and, with an upgrade of pipeline capacities, Azerbaijan could export 20 billion cubic meters to the EU. As you well know, recently the President of the EU Commission Mrs. von der Leyen was here to conclude the Memorandum of Understanding with Azerbaijan, highlighting exactly this situation,” he said.
As Horlemann pointed out, as it is a very important issue for Germany, the country would like to put the main focus on cooperation in renewable energy sources with Azerbaijan.
“Azerbaijan has a huge potential in producing renewables, in terms of solar power, wind energy, and green hydrogen. It would be very interesting for the EU to tap this potential in order to meet its CO2 emission reduction targets. Therefore, we see big potential for more cooperation with Azerbaijan. German companies, of course, with their technologies, the experience, can contribute a lot in this regard,” he added.
Horlemann noted that there are many German companies active in the renewable energy sector, several of which visited Azerbaijan in June 2022.
“German companies are always looking for investment opportunities, and they are looking worldwide for the best conditions. We perceive a huge interest also in Azerbaijan, and we are happy about some recent investments related to the energy sector. For example, there is a joint venture between a German and an Azerbaijani company to produce aluminum - a big investment of 300 million euros,” he said.
According to the ambassador, the investment was made in Azerbaijan because of comparatively cheap energy sources available here, including renewable energy.
“This would open the door for Azerbaijan to the European market, which will import more and more sustainably developed products in the future, including green aluminum,” he added.
Germany holds an intensive dialogue with the Azerbaijani government on the potential in the renewable energy sector, including the prospects for green hydrogen production, the ambassador noted.
“There is an ongoing dialogue between the two governments. Just last Monday, I met the energy minister of Azerbaijan, Mr. Shahbazov, to talk, among other things, about green hydrogen. We understand that the Azerbaijani government is very interested to develop this sector, because they see that there is a huge market, especially in the EU. Azerbaijan has a huge potential in producing renewables, in terms of solar power, wind energy, and green hydrogen, which could be exported to the EU market. The production of hydrogen is a very energy-intensive process. So, if you want to produce hydrogen at a competitive cost, you need renewable energy sources, because they are basically for free, apart from the initial investment you have to make. With the CO2 emission reduction targets of the EU as of 2030, we need to dramatically reduce our CO2 emissions, especially in the energy-intensive industries, and they can only do so by using green hydrogen in the future, instead of conventional gas,” he said.
The ambassador noted the great interest also from the German side, including from the business sector, to engage in the field of renewable energy with Azerbaijan.
“We hope to develop and participate in new projects, proposed by the Azerbaijani side. And, wherever there are public tenders, I am very optimistic and confident that German companies with their huge expertise in the sector will take part. With the very high share of renewable energy sources in the German electricity sector, for example, we are very well-placed to participate in the Azerbaijani market in this field,” he added.
Further speaking, Ambassador Horlemann noted that, fortunately, in the first half of this year there is a strong rebound also in the bilateral trade between Germany and Azerbaijan, and this is a good basis to develop trade and increase exports in various fields.
“One is where Germany traditionally has been very strong, and that is machine building, automotive industry, electronics, chemicals, and etc. There is a second field, which I would like to mention - infrastructure and logistics. Azerbaijan is developing as a hub between East and West. The Middle Corridor project. And there is a huge need for more investments in the logistics and infrastructure of Azerbaijan, in order to cope with the rising flow of trade and investments. So, German companies are very strong in this respect. And the third, and we talked about this before, is the whole sector of renewable energy sources, where German companies have a lot to offer in terms of technology, and where Germany is, politically speaking, a worldwide leader,” he explained.
Speaking about the most promising spheres of cooperation between Germany and Azerbaijan, the ambassador highlighted several fields.
“There are already, I think, over 200 German companies active in Azerbaijan. Around 170 are members of the Azerbaijani-German chamber of commerce. So there is already a great activity going on. And, I think that particularly in the field of energy and renewables there is the biggest potential for the future. And then, again, when we look at the needs of Azerbaijan, what needs to be done, I come back to the whole sector of infrastructure and logistics,” he said.
Regarding the restoration process in Karabakh, and Germany’s role in it, Horlemann noted that Germany sees enormous potential for its companies to participate in the reconstruction process.
“When it comes to the reconstruction process in Karabakh, there is a huge potential for German companies to participate, and the sectors where Germany is traditionally very strong, like machine building, the automotive industry, chemical industry and electronics,” he said.
Germany would be particularly interested in such sectors as sustainable cities, which goes together with renewable energy sources and the concept of smart cities, then, anything that goes down to basic infrastructure and logistics, Horlemann noted.
“A German company, for example, took part in the construction of Fuzuli airport. I think, in Karabakh, there is a need to construct roads, and whole cities, basically. That is where German companies could engage and contribute a lot,” he said.
According to the ambassador, Germany, with its own experience of reunification and reconstruction in East Germany, is very well aware of the magnitude of the task ahead of Azerbaijan in reconstructing Karabakh.
“It is a huge task. And we also share the feelings of the Azerbaijani people concerning the importance of reconstruction, because, during the German reunification and the reconstruction process, there evolved a lot of, let’s say, positive energy from all sectors in the society to engage in reconstruction. So, we have great sympathy and understanding of this situation,” he said.
As Horlemann noted, what is important for an engagement of German companies in the reconstruction process is a stable security situation.
“Firstly, mine-clearance needs to be done. Secondly, there should be a stable environment for investments. In that respect, a peace agreement with Armenia would be of paramount importance in order to create an environment that is attractive for investors. German investors always think long-term, that is why they are well known to be reliable partners in the long run,” he said, adding that if Azerbaijan decides to go for major investments in the long run, a stable investment environment is very important.
The ambassador also pointed out the importance of demining activities of the economic development and the reconstruction of Karabakh.
“Germany has been a leader in the global effort to ban land mines for many years. And we have been engaged in various regions in the world, in Europe in the Balkans, for example, in Africa. There is a lot of knowledge and technology also among German companies, and there is a lot of support for multilateral organizations, mostly the UN, to financially support demining activities worldwide. We are doing the same in the case of Azerbaijan,” he said.
As the ambassador noted, if Azerbaijan was to join the Ottawa Convention to ban land mines, this would help Germany to contribute even more.
Further speaking, Ambassador Horlemann said that Germany is very optimistic to deepen the dynamic relations with Azerbaijan, which developed over the last 30 years.
“Beyond trade and economics, there is of course already a lot of cooperation in the cultural sector. There is a keen interest in Germany to engage with Azerbaijan in the cultural field even further. We have just started a new project on the restoration of historic photos in the Shirvanshakh museum. This is not only about the restoration of photos, but also about passing on the best practices,” he said.
As Horlemann noted, and this shouldn’t be underestimated, there is a huge exchange of people traveling to Germany, and Azerbaijan.
“Human contacts are very important. There are a number of German and Azerbaijani twin cities that have very lively partnerships: Baku with the city of Mainz, Sumgayit with Ludwigshafen. All this is important to promote contacts between the two societies and people, which is practically the basis of everything we do together,” he added.
Wrapping up, the ambassador highlighted the importance of the upcoming celebration of the German Unity Day and noted that Azerbaijan and Germany are celebrating the 30th anniversary of their diplomatic relations this year, and, of course, both countries have regained full sovereignty and their independence and became strong independent states, and that has been a very good basis for the development of the relationship.
“Of course, for us Germans, the 3rd of October, 1990, when both Germanys were reunited, is of very high historic and political importance, because it also signified the end of the Cold War and the division of Europe. So, it has a European, and even a global dimension. It was the end of the East-West confrontation, and the wall came down. We had an opportunity to reunite Europe as a whole. Of course, when it comes to the German reunification, and then the reconstruction, I talked about it in the context of Karabakh, there was no ready-made plan we had in our drawers. We had to improvise a lot, which was also good, to some extent because we were very flexible. But it was a big task: the East German economic system had to change from a planned economy to a market economy; thousands of billions of Deutschmark and Euros were invested in the infrastructure, raising the standard of living of the East Germans; East Germans gained their freedom overnight, but many also lost their jobs overnight; we had to introduce the Deutschmark in East Germany as a common currency; and so on. This is a generational task, something you cannot conclude even in a decade, it takes a whole generation. Yet, of course, the process is still ongoing. But we have come a long way with bringing both parts of Germany together. It has been a success story. Now, what does it have to do with Azerbaijan? Azerbaijan gained its independence roughly one year after German reunification, so, pretty much the same time. We are celebrating the 30th anniversary of our diplomatic relations this year, and, of course, both countries have regained full sovereignty and their independence and become strong independent states, and that has been a very good basis for the development of our relationship. Our relationship has developed very dynamically, and we are very optimistic that we can continue on that road,” he concluded.