Azerbaijan enters cooperation agreements with Chinese BYD Company Limited PHOTO

The Ministry of Economy and the Ministry of Digital Development and Transport are collaborating to renew Azerbaijan's bus fleet, aiming to enhance energy efficiency, safety, and environmental sustainability in the transport system while reducing atmospheric emissions.

A framework agreement was concluded with Chinese BYD Company Limited (BYD) during a session held at the Azerbaijani Cabinet of Ministers, attended by Azerbaijani Deputy Prime Minister Shahin Mustafayev, the Azerbaijani Economy Ministry told Caliber.Az.

A framework agreement was signed by Azerbaijani officials and representatives from BYD Company Limited (BYD) at a meeting in the Azerbaijani Cabinet of Ministers. The agreement focuses on joint cooperation to purchase and maintain electric buses, as well as establish local production in Azerbaijan. The project aims to develop electric transport infrastructure, enhance passenger comfort, mitigate environmental impact, and improve the country's environmental conditions. This agreement, signed just ahead of the 29th Conference of the Parties to the UN Framework Convention on Climate Change (COP 29), hosted by Azerbaijan this year, underscores Azerbaijan’s commitment to global efforts against climate change.

BYD intends to invest in new production facilities to build a comprehensive value chain in Azerbaijan under the agreement. The plan includes collaboration on manufacturing light-duty electric trucks, electric vehicles for utilities, and passenger electric vehicles starting from 2026. Additionally, the assembly of batteries for energy storage is slated to commence from 2028. The joint venture (JV) formed as part of this initiative is set to make additional investments totaling $60 million.

To kickstart the project, a decision has been made to procure electric buses from a company that will produce them locally in Azerbaijan, following a directive from the president. Initially, BakuBus LLC will purchase 160 electric buses and 100 electric chargers from BYD, with plans to deploy these buses in Baku by October 31, 2024.

As part of the collaboration with BYD, the project aims to establish local production of electric buses and gradually localize the production of their components by 2025. Support mechanisms such as joint venture financing and intellectual property rights provision are also included in the project framework. The localization target is set to reach 40 per cent of the total bus cost by 2030. An agreement signing ceremony for the project is scheduled for September 2024.

The Azerbaijan Investment Company will participate as a shareholder in the project aimed at producing electric buses within Azerbaijan. Partnering with BYD in Azerbaijan is Electrify Azerbaijan LLC, a company owned by the SARDA Group of companies.

The joint venture plans to invest approximately $34 million to establish a manufacturing plant for electric buses within the Sumgait Chemical Industrial Park. BYD, the Chinese company, will oversee the construction of the plant. The production capacity is targeted at 500 electric buses annually, considering both domestic demand and potential exports. The project is expected to generate around 800 new jobs.

Founded in 1995, BYD achieved global leadership in 2023 with record sales of three million vehicles powered by new energy sources. The company is renowned as a leader in various technology sectors including automotive, electronics, renewable energy, and railway industries, leveraging cutting-edge innovations.