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Announced last week, Azerbaijan is to receive a significant European Bank for Reconstruction and Development (EBRD) investment to develop two solar projects. The investment was announced during the 29th annual United Nations Climate Change Conference taking place in Baku – COP29. Along with the EBRD, both the Asian Development Bank – ADB – and the Asian Infrastructure Investment Bank – AIIB will provide funding for the projects.
A total of US$160 million will be given by each of the three multilateral development banks. The funding will allow for the construction of two solar power plants in Azerbaijan with a capacity of 760 MW altogether. The firms Masdar and SOCAR Green are acting as sponsors of the two projects. Already, both firms have begun construction activities on their 445-MW and 315-MW solar parks.
Project Locations
Situated in Bilasuvar and Neftchala, the plants are to be commissioned in 2027. Additionally, they are the largest renewable energy projects in the Caucasus, with a total cost of US$600 million. Azerbaijan aims to raise the share of renewable energy in total power production to 30 percent within the next six years. The Bilasuvar and Neftchala projects make a big stride towards that goal.
Nandita Parshad, Managing Director of the European Bank for Reconstruction and Development’s Sustainable Infrastructure Group, commented: “We are very pleased to be financing these solar plants, the largest to date in the Caucasus. The projects will save more than 600,000 tons of CO2 annually. What is more, the projects will also have a real-life impact by powering up to 300,000 homes with green energy. This major investment will change the face of the entire renewable energy market in the region.”
More on the EBRD Azerbaijan deal
The European Bank for Reconstruction and Development is one of the leading global institutions in terms of mobilizing funds for climate action. It has been able to tap into the private sector’s finance in its economies. In 2023 alone, it invested over €6.5 billion in green financing, accounting for 50 percent of total investment.
“The projects were inaugurated just a few weeks ago,” said Mohmed Jameel Al Ramahi, Chief Executive Officer at Masdar. He said these two large solar projects began operations shortly after completing what is currently Azerbaijan’s biggest ever solar power plant—October 2023—the 230 MW Garadagh.
Up to now, Masdar has signed agreements to develop clean energy projects with a total capacity of 10 GW in Azerbaijan, including solar power, onshore wind, and integrated offshore wind and green hydrogen projects.
Founded in 2006, Masdar has developed or partnered with projects in over 40 countries. But it has now been saddled with the responsibility to grow its renewable energy portfolio capacity to 100 gigawatts by 2030. In addition, this will make it one of the largest producers of green hydrogen by that year as well.
The Gradagh Solar Plant
The Garadagh Solar plant was constructed with the assistance of foreign investment. The estimated value of the plant is US$262 million. This facility is the first industrial-scale solar installation to be developed through foreign investment in Azerbaijan. It annually produces 500 million kilowatt-hours of electricity, saving 110 million cubic meters of natural gas. At the same time, emissions of carbon to the atmosphere will be reduced by 200 thousand tons. The power plant covers 550 hectares. There are 570,000 solar panels installed. A substation of 330 kilovolts was also constructed to link this plant to the grid. |
