Azure Developer CLI does not recognize environment

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On the project I am working we use azure services. When i was working on my old computer it all worked fine.
I had to switch computer recently and i cloned the code from devops, so the code should work. I installed the Azure Developer CLI and now when I try to build the project i get the following error: Azure no developer environments found

My code is organized in the following way and as you can see there is the .azure folder in which i have the env file (I updated the folder name now but also with the original name i get the same error)

Folder structure

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