European Investment Bank explores "green" bond issuance in Azerbaijan

The European Investment Bank (EIB) has expressed interest in issuing "green" bonds and supporting "green" energy projects in Azerbaijan.

The projects are related to renewable energy, green hydrogen, sustainable transport, municipal infrastructure development, energy efficiency, and modernization of power grids.

The bank emphasized that Azerbaijan has significant potential for hydrogen exports, as well as for the development of solar and wind energy, Caliber.Az reports, citing local media.

"The financing mechanisms that can be offered include long-term loans, guarantees, and technical assistance aimed at the successful implementation of such projects," the EIB stated.

Among the bank’s priorities are green energy, energy efficiency, digitalization, sustainable infrastructure development, and enhanced connectivity.

"EIB Global intends to cooperate with other international financial institutions and is ready to consider projects aimed at developing regional connectivity, including underwater energy and digital links between the European Union and the South Caucasus region," the bank noted.

Meanwhile, the European Investment Bank is also considering the issuance of green bonds in Azerbaijan.

The bank highlighted that the EIB has extensive experience in green financing worldwide, including issuing bonds to support environmentally sustainable projects.

"Given Azerbaijan’s commitment to diversifying its economy, as well as its active investments in renewable energy and energy efficiency, there is a promising opportunity to attract financing from the EIB for the issuance of green bonds. However, this requires the establishment of a reliable regulatory framework and a clear pipeline of environmentally sustainable projects," the bank stressed.

To note, green bonds have already been issued in Azerbaijan by several organizations. In particular, Rabitabank OJSC issued bonds worth 10 million manats ($5.88 million) with a two-year maturity and an annual interest rate of 9.5%.

Unibank OJSC issued bonds totaling 20 million manats ($11.7 million) for a term of 36 months with an annual yield of 11.5%.

The State Oil Company of Azerbaijan (SOCAR) has also launched green bonds to support environmentally-focused projects under the SOCAR Green initiative. These bonds have a face value of $1,000, offer a 6% annual return, and have a total issuance volume of $200 million with a five-year maturity.

By Khagan Isayev