By Abbas Nazil
Two small hydropower plants in Azerbaijan have generated the country’s first internationally certified carbon credits, marking a milestone for the nation’s renewable energy sector.
The Hydro-3 initiative, encompassing the Mirik and Garagishlag plants in the Lachin district, was developed through a partnership between the state utility Azerenerji and SOCAR Trading.
The project was registered with the Gold Standard certification body on 28 May 2025, and the credits were formally issued on 28 January 2026, covering emissions reductions achieved between April 2024 and August 2025.
A total of 10,745 carbon units were issued, confirming measurable reductions in greenhouse gas emissions associated with the operation of the two small hydropower plants.
Azerenerji noted that this represents the first set of internationally recognized carbon credits generated by renewable energy projects in Azerbaijan, demonstrating the country’s progress in implementing its national green-energy strategy.
The issuance of the credits highlights international recognition of the renewable energy potential in the Karabakh region, underscoring the growing role of market-based emissions mechanisms in regional hydropower development.
This development signals a shift toward using carbon markets to incentivize clean energy investments, providing financial and environmental validation for small-scale hydro projects.
The Hydro-3 project demonstrates how renewable energy facilities can contribute to global carbon reduction targets while simultaneously supporting local energy infrastructure and sustainability goals.
The recognition of the carbon credits may encourage further investment in Azerbaijan’s renewable energy sector, attracting both domestic and international stakeholders interested in carbon markets and sustainable power generation.
Experts suggest that the success of Hydro-3 could serve as a model for other emerging markets seeking to integrate hydropower with internationally recognized carbon finance mechanisms.
By linking tangible emissions reductions to verified carbon credits, Azerbaijan is creating new opportunities for revenue generation while advancing climate action priorities.
The project reinforces the importance of small hydropower plants in reducing greenhouse gas emissions and highlights the potential of combining renewable energy generation with international carbon market mechanisms for long-term sustainability.
This achievement positions Azerbaijan as a regional leader in renewable energy innovation and signals expanding opportunities for market-based climate solutions across the Caucasus and beyond.
