Azerbaijan, World Bank sign $173.5 million loan accord to boost renewable energy PHOTO

The Government of Azerbaijan and the World Bank have signed a loan agreement aimed at expanding the use of renewable energy sources in the country.

At a signing ceremony, two key documents were approved: a loan agreement between the state energy company “Azerenerji” and the International Bank for Reconstruction and Development (IBRD), and a guarantee agreement between Azerbaijan and the IBRD, Caliber.Az reports via local media.

The $173.5 million loan agreement was signed by Baba Rzayev, Chairman of the Board of Azerenerji, and Stefanie Stallmeister, World Bank Manager for Azerbaijan. The guarantee agreement was signed by Azerbaijan’s Finance Minister Sahil Babayev and Stallmeister.

The loan funds will be used to strengthen Azerbaijan’s energy transmission infrastructure, ensuring the safe and sustainable integration of power generated by new renewable energy plants currently under construction into the national grid.

The loan has a 15-year term, including a five-year grace period, with full repayment expected by 2039. The Azerbaijani government is contributing $31.2 million, primarily to cover VAT and customs duties related to the project.

Spanning four years, the project’s main objective is to enhance the efficiency of Azerenerji’s energy system and support the safe incorporation of renewable energy sources into the country’s power transmission network over the coming five years.

Financed components by the World Bank include the construction of four new high-voltage power transmission lines — with voltages of 500 kV and 330 kV — covering a total length of 341 kilometers. The project also includes the procurement of a transformer and related equipment for the Navai 500/330/10 kV substation.

By Sabina Mammadli