EBRD considers $100 million green finance programme in Azerbaijan

The European Bank for Reconstruction and Development (EBRD) is considering launching a Green Economy Financing Facility (GEFF) programme in Azerbaijan.

GEFF is a five-year, $100 million (approximately €85.6 million) project designed to promote “green financing” through selected local financial institutions (PFIs). The programme is scheduled to be approved by the bank’s Board of Directors on December 3, Caliber.Az reports, citing the official website of EBRD.

The bank stated that the funds would be allocated to lending for private companies implementing projects in the fields of energy efficiency, renewable energy, resource efficiency, circular economy, and climate resilience. The initiative will serve as a pilot mechanism for introducing “green financing” tools in Azerbaijan, supporting the country’s transition to sustainable development.

According to the EBRD, the main goal of GEFF is to assist local financial institutions in providing green loans to retail customers, small and medium-sized enterprises, and corporate borrowers.

The programme envisions both financing and technical assistance for partner banks and microfinance institutions, helping strengthen their institutional capacity and remove barriers to the growth of green lending. Particular attention will be paid to ensuring equal access for men and women to green finance opportunities.

The EBRD emphasised that the project builds on Azerbaijan’s growing commitment to the green economy, especially following the COP29 conference held in Baku in November 2024. The programme aims to promote the adoption of green technologies and services in the private sector while fostering the transformation of the country’s financial system.

Eligible borrowers under GEFF will include banks, microfinance institutions, and leasing companies prepared to expand green lending. The ultimate beneficiaries will be small and medium-sized enterprises, corporate clients, and households.

The programme will also include a technical assistance package worth up to $3 million (€2.8 million), covering project management and coordination, sub-project selection, development of new financial products, marketing, and training. In addition, up to $4 million (€3.4 million) in incentive funding will be provided to financial intermediaries based on performance results.

As of September 30, 2025, the EBRD’s current loan portfolio in Azerbaijan amounted to €948 million, of which 89% (€842 million) was directed toward sustainable infrastructure, 6% (€56 million) to the financial sector, and 5% (€49 million) to the corporate sector.

By Jeyhun Aghazada