AIIB to finance construction of solar power plants in Azerbaijan

The Asian Infrastructure Investment Bank (AIIB) has signed an agreement to finance its first renewable energy project in Azerbaijan, amounting to $160 million with private sector involvement.

In partnership with Abu Dhabi Future Energy Company PJSC (Masdar), the funds will be directed toward the development, construction, operation, and maintenance of two solar power plants: Banka Solar (315 MW) and Bilasuvar Solar SPV (445 MW), Caliber.Az reports, citing local media.

Masdar's local partner, SOCAR Green, a company appointed by the Azerbaijani government, underscores the country's commitment to a low-carbon future. Co-financing for the project is provided by the Asian Development Bank (ADB) and the European Bank for Reconstruction and Development (EBRD).

This initiative marks AIIB's first renewable energy project in Azerbaijan involving private capital. It aligns with AIIB’s thematic focus on green infrastructure and its corporate and energy strategies. Once operational, the solar plants are expected to deliver clean, affordable electricity, reduce greenhouse gas emissions by approximately 757,000 tons of CO₂ equivalent per year, and create significant local employment opportunities. The project will also support Azerbaijan in meeting its climate goals under the Paris Agreement and its updated Nationally Determined Contributions (NDCs).

Nadim Haider, AIIB’s Director General for Projects and Corporate Finance, stated, “This project confirms AIIB’s commitment to supporting Azerbaijan’s ambitious energy transition and enhancing the resilience of the country’s energy infrastructure to achieve its climate targets. The investment highlights AIIB’s dedication to mobilizing private capital to expand its renewable energy portfolio and secure a sustainable future for Azerbaijan and the region.”

The project adheres to the shared principles of multilateral development banks for tracking financing for climate change mitigation and is fully financed for climate adaptation. It has undergone a rigorous climate risk assessment to ensure alignment with the Paris Agreement and Azerbaijan’s National Adaptation Plan.

The Banka and Bilasuvar solar power projects are the third in AIIB’s portfolio in Azerbaijan. This marks the first non-sovereign guaranteed loan in the country, showcasing AIIB’s efforts to diversify its portfolio and strengthen renewable infrastructure in the Caucasus. To date, AIIB has financed seven projects in the Caucasus, covering sectors such as energy and transport, with a focus on sustainable infrastructure to support long-term regional growth and resilience.

By Khagan Isayev