Azerbaijan’s goal of diversifying its energy mix has received a major boost with the approval of a $114.2 million financing package from the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB), the Japan International Cooperation Agency (JICA), and the Abu Dhabi Fund for Development (ADFD).
Citing EBRD, that the funds will be used to commission a 230-megawatt (MW) photovoltaic (PV) solar power plant located near the Alat settlement in eastern Azerbaijan.
EBRD to provide US$ 21.4 million, remaining US$ 92.8 million by ADB, JICA, and ADFD.
The funding will be provided to the Garadagh Solar Project developer Masdar Azerbaijan Energy LLC, which is fully owned by Abu Dhabi Future Energy Company. Masdar is a leading renewable energy company operating globally and an existing client of the Bank, ADB, JICA, and ADFD.
Masdar’s solar power plant is the first privately owned, utility-scale solar power project in Azerbaijan.
Today’s agreement sets a precedent for further private-sector participation in Azerbaijan’s renewable energy market actively supported by the EBRD at the policy and investment level. Once commissioned, the plant’s 230 MW of renewable energy will generate up to 558 Gigawatt hours (GWh) of electricity, reducing annual CO2 emissions by up to 265,000 tonnes.
This will not only support Azerbaijan’s decarbonization agenda but also contribute to European energy security by increasing the availability of domestic gas for exports. The project will thus contribute to priorities set out in the United Nations 2030 Sustainable Development Goals (SDGs), namely, clean and affordable energy, industry, innovation and infrastructure, and climate action.
The EBRD is an important institutional investor in Azerbaijan. To date, the Bank has invested more than €3.6 billion in 181 projects there. The Bank’s strategy in the country focuses on helping Azerbaijan to diversify its economy and develop the non-oil private sector.