Railways around the world are entering a new era; this era is characterized by electrification, digitalization, and fundamental changes in the production and use of energy, Cindy Cisneros Tiangco, Director of the Developing Sectors Department at the Asian Development Bank (ADB), said during the presentation of the decarbonization project carried out within the partnership between Azerbaijan Railways CJSC (ADY) and the Asian Development Bank, APA-Economics reports.
She noted that from Japan and China to Australia and Europe, global leaders are building smart, low-carbon railway ecosystems:
“Azerbaijan not only has the opportunity to be part of this movement, but also a unique chance to contribute to shaping its future. The uniqueness of this TA lies in its combination of innovation in both engineering and finance. On the engineering side, we will explore integrated solutions—such as renewable energy, battery storage systems, smart microgrids, regenerative braking, and even carbon sequestration approaches that can directly reduce fossil fuel use and minimize dependence on the electricity grid.
When these solutions are implemented in a modular and systematic manner, they can reduce ADY’s long-term energy costs and significantly shrink its carbon footprint. Financial innovation is equally important. Deep decarbonization requires creative financing that brings together public and private capital, opening new revenue streams. These include carbon monetization, green finance, PPP-based renewable energy projects, strategic logistics partnerships to shift freight from road to rail, and packaging modern energy systems into investment-friendly bundles.”
She added that long-term PPAs (power purchase agreements) can attract private investment, while performance-based leasing can facilitate the adoption of advanced technologies:
“These instruments are not add-ons—they are catalysts that accelerate ADY’s progress while keeping fiscal impacts manageable. I would also like to emphasize the importance of capacity building. Modern technologies such as battery tenders, microgrids, and smart substations create real value only when supported by strong institutional capabilities.
For this reason, the TA places special emphasis on developing the technical, operational, and managerial skills required for ADY to operate a modern, low-carbon railway system for decades. Through targeted training, workshops, and joint analytical work, ADY teams will gain practical knowledge of global best practices and cutting-edge engineering and financing approaches. The goal is not just to introduce new systems, but to build lasting in-house expertise within ADY.
At ADB—particularly within the New Sectors Team—we prioritize projects that integrate sectors, modernize technology, and demonstrate climate leadership. ADY’s decarbonization ambitions align perfectly with these priorities. The railway can serve not only as a provider of clean transport corridors, but also as a producer of renewable energy, a driving force for green logistics, and a climate-resilient smart infrastructure model for the region.
We see this TA as an important stage in a long-term partnership. The outcomes will help shape an ambitious yet practical and globally competitive decarbonization program. Finally, I would like to once again express my sincere gratitude to ADY leadership and technical teams for your visionary outlook and strong engagement, as well as to the consulting team for the significant work already underway.”
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