Why Turkey’s ambitions are focused on the South Caucasus

Turkish President Recep Tayyip Erdoğan makes a statement in Ankara. Erdoğan has seen the region of the South Caucasus as an opportunity to strengthen his own influence at home and abroad. Photo: Ibrahimbeyy / Shutterstock

Since that time, Turkish politics have changed significantly. First, economic problems have forced Erdoğan to revise Turkey’s foreign policy. Thus, its main goal is to now stabilize the country’s financial situation by increasing trade and attracting foreign investments. Second, Turkey’s ambition is to become an important energy hub and to profit economically and strategically from offering its territory for the transport of energy resources: gas, oil and those created from renewable sources. Yet, in order for this to happen, Turkey will need to expand its cooperation with the countries of the South Caucasus. 

One nation in two states

The Republic of Azerbaijan is without a doubt Turkey’s closest ally in the South Caucasus. Both countries are members of the Organization of Turkic States and their political leaders repeatedly emphasize their close relationship, stressing that they are one nation in two states. Azerbaijan, in addition to having access to the key natural resource of oil, is well-located at the crossroads of important transport routes. These include China’s New Silk Road and Russia’s North-South Corridor, which links Russia to India via Iran. These routes are used for running large infrastructure projects such as the Baku-Tbilisi-Ceyhan oil pipeline, the Baku-Tbilisi-Kars railway line, and the New Silk Road project. These all help to connect Central Asia and China with Europe via the territory of Turkey.

These routes are also intended to serve – as in the case of the rail link connecting Azerbaijan, Georgia and Turkey – as a transport corridor and an alternative to the maritime route. The importance of these alternative connections is even more evident during blockades or conflicts when supply chains are disrupted, as has been the case in recent years and especially with Russia’s invasion of Ukraine.

In Turkey’s plans to transport energy resources to Europe, an important role is played by the Nagorno-Karabakh region. This territory is now fully a part of the Republic of Azerbaijan following September 2023, when the unrecognized and self-proclaimed Nagorno-Karabakh Republic was abolished. This region is seen as one with an overall high potential for energy production, especially from renewable sources. In the north and especially in the Jabrayil and Zangilan regions, there are areas where solar energy projects can be developed, while in the Lachin and Kalbajar mountainous regions the “presence of favourable wind potential” has been identified. On top of all these, examinations have been underway to find geothermal energy sources, with the highest chance of finding them estimated to be in the Lesser Caucasus Mountains.

Recognizing this potential, the Azerbaijani government decided to create zero-emission green energy zones in the Nagorno-Karabakh and eastern Zangezur regions where, according to various estimates, the potential for solar, wind and hydroelectric energy exceeds ten gigawatts. Nonetheless, harvesting the green energy potential of Nagorno-Karabakh will only be possible when its status is finally stabilized. Of course, given Armenia’s uncertain position since 2020 without significant Russian support, it is very likely that Azerbaijan, supported by Turkey, will maintain Nagorno-Karabakh within its borders.

According to the assumptions behind the aforementioned energy projects, the transportation of green energy generated in Nagorno-Karabakh will need to go through the Zangezur transport corridor (also known as the Nakhchivan corridor). It will connect the Nakhchivan Autonomous Republic (an exclave of Azerbaijan) with the rest of Azerbaijan through the Armenian province of Syunik. To make it happen, Azerbaijan uses the stipulations of the 2020 ceasefire agreement where, despite no mentioning of the corridor’s name, the unblocking of the region’s economic and transport links is stated and discussed. Armenia fears that a transport corridor – a motorway and a railway line – will allow Baku to make the area extraterritorial and exclude it from Yerevan’s sovereignty.

This fear is not ungrounded. Turkey and Azerbaijan have already started building infrastructure projects together. On September 23rd 2023 Erdoğan met with Azerbaijani President Ilham Aliyev in the Nakhchivan Autonomous Republic. Both leaders took part in laying the foundations for the construction of the new gas pipeline. Erdoğan declared that the opening of the corridor is a priority for Baku and Ankara, as it will provide a railway and transport line, and perhaps in the future even a pipeline to transport energy to Turkey and Europe. Construction of the route and renovation of the stations have already begun.

The railway line in Kars connects with the railway line from Georgia and has a branch leading to Iran. Notably, due to lack of progress in the construction of the transport line by Armenia, Azerbaijan decided to hold talks with Iran on the construction of rail and road links through the Iranian territory which is close to the Armenian border. These negotiations ended successfully and construction works have begun. Naturally, these two corridors are not mutually exclusive, and in the future, if a route through Armenian territory is also built, they could be used in parallel. These transport corridors represent an alternative path to the route through Russia. Thus, China, among others, has also shown its interest in them.

With and without Turkey

The Organization of Turkic States is an important format for cooperation also in the field of energy. So far, collaboration between Azerbaijan, Kazakhstan and Turkmenistan in the energy sector has been formally announced. However, Turkey is active in this regard as well, mainly by its involvement in the pipeline project that goes through the Caspian Sea and which is routed through Turkey to later reach Europe. Kyrgyzstan, a country with excellent hydropower potential, has also declared its willingness to enhance cooperation.

Despite the format of the Organization of Turkic States and subsequent high-level meetings and declarations, it is clear that cooperation between the states that form this organization is not always easy. For example, Azerbaijan and Turkmenistan are in dispute over the status of the Caspian Sea – the basin’s division, along with the hydrocarbon deposits there. Kazakhstan has, in parallel, been cooperating with Russia and China on energy projects.

Since Russia’s aggression in Ukraine in February 2022, we have clearly been seeing a significant acceleration of energy projects that go from the South Caucasus through Turkey to Europe. This is also a result of the change in the European Union’s energy policy, which now sees diversification of gas supplies and independence from Russian gas as a priority. Thus, among strategic energy projects is the Southern Gas Corridor, which will transport gas from Azerbaijan (and, in the future, perhaps other countries in the Caspian region) through Georgia and Turkey to Europe.

This corridor has already attracted wide interest from many parties. It was the topic of discussion at a high-level meeting in Baku which was organized in February 2023. The event was attended by representatives from the European Union but also individual countries, including: Azerbaijan, Albania, Bulgaria, Croatia, Georgia, Greece, Italy, Hungary, Moldova, Montenegro, Romania, Serbia, Turkey, Ukraine, the United Kingdom and the United States. The corridor which now transports natural gas is expected to be used in the future to also transport green energy.

Despite all of the above, we cannot say that Turkey is a component of all Azerbaijani energy and transport projects. For example, in December 2022, Azerbaijan signed an agreement with three countries (Georgia, Hungary and Romania) to build a strategic partnership in developing and transmitting green energy. Turkey is not a part of this partnership. The four signatory countries yet agreed to cooperate on constructing a green energy transmission channel from Azerbaijan to the European Union.

The project omits the territory of Turkey, as it runs along the bottom of the Black Sea. The investment cost is significant and is estimated at around 2.3 billion euros. The chances for success are seen as high. Olivér Várhelyi, the EU Commissioner for Neighbourhood and Enlargement, declared that the EU would cover part of these costs as the project coincides with the EU’s plans to achieve carbon neutrality. In addition, it enables the diversification of energy sources and makes the EU economy less dependent on Russian supplies. 

Turkey, with its ambitions to become an energy hub, obviously took note of its omission from this project, especially because ensuring energy security is one of Ankara’s top priorities. With Turkish-Azerbaijani relations in mind, it is also worth remembering that Ankara’s dependence on Azerbaijani energy supplies, as well as the economic importance of transit, has already been used politically by the government in Baku to put pressure on Turkey. This was the case between 2008 and 2010, when Turkey and Armenia tried to normalize bilateral relations. 

As stated before, with Azerbaijan unquestionably being Turkey’s most important partner in the South Caucasus and many energy projects being a top priority for Turkey, it is important to understand that both countries need a transport corridor through Georgia, Armenia or Iran in order for their ambitious visions to be realized. Thus, in addition to plans to launch the Zangezur transport corridor, many things on the ground could still be improved. First, there is the question of Baku’s relations with Iran, which despite having an agreement with Turkey supported Armenia during the Nagorno-Karabakh conflict, threatening Azerbaijan that it could intervene militarily should it violate Armenia’s borders. Iran’s relations with Turkey are also complicated. Namely, despite several high-level Turkish-Iranian meetings which have been organized in recent months, both countries continue to be involved in Syria, but on the opposite sides of the conflict. 

Thus, a transport corridor that would run through Georgia is a much safer project. Launching a strategically important transport project that would run from the Caspian Sea through Georgia to Turkey is seen as one of the key issues in Turkish policy designed to support Georgia. Georgia is also the country through which road transport infrastructure from Russia to Turkey is channelled. Thus, Turkey is among Georgia’s key trading partners and one of the largest exporters of goods to the country. In addition, the Turkish company TAV Airports Holding operates international airports in both Tbilisi and Batumi. This activity is not only important in economic terms but also builds a positive image of Turkey in Georgia. In 2020 at the World Economic Forum in Davos, the then-Turkish foreign minister, Mevlüt Çavuşoğlu, declared that Turkey supported Georgia’s admission into NATO. The situation could become more complicated should Georgia be admitted to the EU before Turkey. Naturally, before such an enlargement takes place, there is still a long way to go and clearly the EU still has a chance to work out other types of cooperation with Ankara, which would be beneficial to both sides. 

Stabilization above all

It is evident that Turkey is very keen to be increasingly involved in the South Caucasus. Its interests in this region are inextricably linked to cooperation with Azerbaijan and numerous transport projects, particularly those that allow for the transportation of energy resources. Following Russia’s invasion of Ukraine, the importance of supplying energy from the Caspian Sea to Europe has only become more crucial.

This has led to a demand for increased pipeline capacity and even the construction of new pipelines. For economic and strategic reasons Ankara hopes that these projects can run through its territory, which would be facilitated by close cooperation with Azerbaijan, one that is based on a strategic partnership. Such cooperation, however, does not mean that Baku excludes the possibility of projects that would bypass Turkey or using cooperation with Ankara as an effective leverage tool in their bilateral relations on other issues.

The most important condition, however, for all of the discussed projects is a stable and predictable situation in the region. Experience indicates that conflicts make the supply of energy resources difficult, especially in this region. That is why it is so important to work the contentious issues out or ensure that they do not affect economic interests.

Karolina Wanda Olszowska is an associate professor at the Jagiellonian University in Kraków. She is the author of the book Stosunki turecko-amerykańskie i turecko-sowieckie w latach 1945-1952 (Turkish-American and Turkish-Soviet relations in 1945-1952).

Russia, South Caucasus, turkey