The leaders of Azerbaijan, Georgia, Hungary, and Romania have signed an agreement in Bucharest to build an underwater electric cable under the Black Sea.

The project could become a new power source for the European Union as the bloc seeks to reduce its reliance on Russian energy.

Former U.S. Deputy Assistant Secretary of State for Europe and Eurasia, Matthew Bryza told the Accent that "Georgia has been a reliable and strategically significant transit state and will become even more so with the electrify cable project under the Black Sea."

"The details of the new electricity cable project have not yet been disclosed , so it is difficult to say what its economic benefit may be, including for Georgia. Generally speaking, however, it is clear that Azerbaijan is planning large investments in renewable energy, taking advantage of strong and consistent supples of wind and sunlight on the territory of Azerbaijan. A subsea cable across the Black Sea will provide Azerbaijan access to lucrative European markets. Georgia will also benefit from these new electricity supplies and from transit fees for the electricity moving across its territory. Georgia has been a reliable and strategically significant transit state for oil, natural gas, and road and rail cargo moving between the greater Caspian region for several years, and will become even more so with the electrify cable project under the Black Sea," former U.S. Ambassador to Azerbaijan told the Accent.

The Memorandum signing ceremony was held in Romania's Cotroceni Palace on December 17. The document was signed by the Prime Minister of Georgia, Irakli Garibashvili, the President of the Republic of Azerbaijan, Ilham Aliyev, the Prime Minister of Romania, Nikolae Chuka and the Prime Minister of Hungary, Victor Orban. The President of the European Commission, Ursula von der Leyen attended the ceremony.

The agreement involves a 1,100-km (685-mile) electric cable of 1,000 MW under the Black Sea, from Azerbaijan to Romania, as part of wider European Union efforts to diversify energy resources away from Russia amid the Ukraine war.

“Given the current security context marked by the military aggression against Ukraine we need to cooperate better and show more solidarity to mitigate common challenges,” Romanian President Klaus Iohannis told the meeting also attended by European Commission President Ursula von der Leyen.

“Our energy co-operation responds to a strategic impetus. It will enhance our energy resilience and ensure diversification of supply and transport routes. It is market driven given increased energy demand in Europe,” Iohannis said.

Von der Leyen told the meeting that the EU’s strategy to turn its back on Russian fossil fuels and diversify towards what she called “reliable energy partners” was working.

She said the EU was ready to provide financial support to the project pending the results of a feasibility study.

“To integrate a growing share of renewables, we need indeed stronger electricity interconnections. This is why the Black Sea energy cable between Romania, Georgia and Azerbaijan is so important,” von der Leyen said.

“It will help reinforce our security of supply by bringing electricity from renewable sources to the EU via Romania and through Hungary.”

Von der Leyen said the Black Sea cable could transform Georgia into an electricity hub and integrate it into the EU internal power market, while it could also help start rebuild Ukraine’s energy system and the country’s reconstruction.

The electricity cable will connect Georgia and the entire South Caucasus to Romania, allowing the export of “green energy” to Europe and the strengthening of mutual resilience.

The EU Commissioner for Neighbourhood and Enlargement Olivér Várhelyi revealed on December 12 that the EU will allocate EUR 17 billion for the economic and investment plan of the Eastern Partnership (EaP), including EUR 2.3 billion aimed at creating the Black Sea strategic submarine electricity cable between Georgia and the EU.