EBRD supports modernisation, construction projects in Azerbaijan’s Ganja, Bilasuvar

The European Bank for Reconstruction and Development (EBRD) has approved a sovereign loan worth 35 million euros ($37 million) to improve water supply, sewage systems, and stormwater management, as well as to construct wastewater treatment facilities in Azerbaijan’s Ganja city.

The total project cost amounts to 410 million euros ($438 million). The financing will be provided in several tranches, with co-financing from an international donor through an investment grant, Caliber.Az reports via local media.

This project is part of the EBRD's "Green Cities" programme and addresses a critical environmental challenge, namely, enhancing the accessibility and quality of water. It aligns with the goals outlined in Ganja's "Green City Action Plan." The initiative is a priority for the government, as it aims to modernise the city’s water supply and drainage infrastructure, crucial for supporting sustainable urban development. Upon completion of the project, Ganja will be provided with a stable water supply and wastewater services, while flood risks will be reduced through the implementation of a stormwater management system.

The project will also have a positive environmental impact by treating wastewater before it is discharged into the Ganja River. The project implementation will improve water supply quality, reduce water losses, and ensure proper wastewater treatment, thus supporting the transition to a greener economy. A Corporate Governance Action Plan will be developed to ensure effective project management. 

The project will align Ganja's water supply and sewage systems with both national and European standards. Potential negative impacts during construction will be minimised through adherence to best construction practices. As part of the Financial and Operational Performance Improvement Programme (PIP), new wastewater treatment facilities will be built, enabling Ganja to meet modern wastewater treatment standards. The project is not expected to impact protected areas or cultural heritage sites. During construction, precautionary measures, including procedures for handling any accidental archaeological discoveries, will be taken. 

There will be no need for resettlement of residents or the acquisition of private land, with these aspects to be further verified during project implementation. To ensure safety at construction sites, contractors will be required to adhere to an Environmental and Social Management Plan. Relevant environmental and social criteria will be incorporated into the tender conditions and contracts. The borrower for the loan is the Azerbaijani Finance Ministry, while the beneficiary is the State Water Resources Agency.

Moreover, the EBRD has also approved a long-term loan worth $95 million for the development, construction, and operation of the 445 MW Bilasuvar Solar SPV solar power plant in Bilasuvar district.

The total project cost is $383 million, with additional support from several other international financial institutions. The project is being carried out by Abu Dhabi Future Energy Company, a subsidiary of Masdar (UAE). The new solar plant will significantly increase renewable energy generation capacity in Azerbaijan, assisting to replace gas-fired power stations and meet the country’s carbon reduction targets in line with the Paris Agreement. The project is expected to lead to annual CO2 savings of up to 442,000 tons, playing a key role in the country's transition to a low-carbon economy and reducing its reliance on thermal power generation.

Environmental assessments indicate that the project will have no significant impact on biodiversity zones for waterfowl. Site surveys and local authorities have confirmed that no cultural heritage sites were found in the area; however, a precautionary procedure has been established for handling any unexpected archaeological discoveries during the construction phase. The 90-kilometre 330 kV power transmission line connecting the solar power plant to the Navahi substation passes near two key bird habitats and an important migratory corridor. 

The Azerbaijani government, responsible for constructing this transmission line, will need to adhere to the World Bank's Environmental and Social Standards, including adjustments to the line's route to avoid ecologically sensitive areas and minimise risks to bird populations. The project site spans 1,454 hectares of agricultural land, which will be transferred to the Ministry of Energy for project implementation. The land is primarily used by herders for livestock grazing, mainly during winter. The project will result in the forced physical and economic displacement of 12 vulnerable herding households. Three households have already been impacted by the project. 

The impact associated with land acquisition for auxiliary facilities, including the 90-kilometre transmission line from the project to the Navahi substation (affecting 84 households), will be managed by the Azerbaijani government in accordance with the World Bank’s requirements under the AZURE project agreement. To minimise socio-economic impacts, the route of the transmission line will be adjusted to avoid displacement and reduce disruptions to the local communities’ way of life. In line with WB standards, a dedicated plan to mitigate residual risks will be developed.

By Naila Huseynova