President Ilham Aliyev of the Republic of Azerbaijan has established a unified regulatory body in the utilities sector in order to increase operational efficiency. Commenting on this development, Ayaz Chaparli, Head of Department at the Center for Analysis of Economic Reforms and Communication (CAERC), stated that the newly established Agency has been created on the basis of the State Energy Supervision Department and the State Gas Supervision Department under the Ministry of Energy, with the status of a public legal entity.

As a result of the comprehensive economic reform policy carried out by President Ilham Aliyev, the favorable environment created in the country has had a positive impact on various sectors, including the construction sector, where investment levels are now rapidly recovering. The planned measures in the field of energy supply for new buildings make it necessary to further improve the level of utility services, align them with international standards, and expand the use of alternative and renewable energy sources.

In this regard, the newly established Energy Regulatory Agency will perform the following functions in the areas of electricity and heat energy, as well as gas supply:

• Regulating relations among market participants;

• Analyzing the activities of enterprises and submitting proposals related to restructuring measures;

• Aligning provided services with the requirements of a market economy;

• Implementing measures to establish a healthy competitive environment among operating enterprises;

• Developing incentive mechanisms to diversify production and attract investment;

• Organizing oversight to ensure compliance with requirements related to engineering and utility infrastructure systems and service quality.

It is particularly emphasized that energy supply will become more transparent, flexible, and accessible for entrepreneurs.

The establishment of the Energy Regulatory Agency as a regulatory body that enhances efficiency in the utilities sector and ensures the use of effective mechanisms to attract investors was envisaged in the “Strategic Roadmap for the Development of Utilities (Electricity and Heat Energy, Water, and Gas) in the Republic of Azerbaijan.” Thus, under the leadership of President Ilham Aliyev, this important new step within the framework of comprehensive economic reforms creates favorable conditions for ensuring sustainability and efficiency in regulating the utilities sector alongside the development of the non-oil sector.