Loan package for solar power plant construction in Azerbaijan totals $114.2 million

The loan package for the construction of a solar power plant (Alat Solar project - Garadag solar power plant) with a capacity of 230 megawatts (MW) near the village of Alat in Azerbaijan will amount to $114.2 million, which will be provided to the limited liability company Masdar Azerbaijan Energy (MAE).

Azerbaijan's goal to diversify its energy balance has received a significant boost after the decision to provide a financing package in the amount of $114.2 million from the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB), the Japan International Cooperation Agency (JICA) and the Abu Dhabi Development Fund (ADFD), Report informs citing the EBRD. 

These funds will be used to put into operation a photovoltaic solar power plant with a capacity of 230 megawatts (MW), located near the village of Alat in the east of Azerbaijan, the EBRD notes.

Today, a loan agreement was signed between ADB and the limited liability company Masdar Azerbaijan Energy (MAE) in the amount of $21.4 million. The remaining $92.8 million will be provided by the EBRD, JICA and ADFD.

Financing will be provided to the developer of the Garadag project, Masdar Azerbaijan Energy LLC, which is fully owned by Abu Dhabi Future Energy Company. Masdar is a leading renewable energy company operating worldwide and an active client of the EBRD, ADB, JICA and ADFD.

"The Masdar solar power plant is the first private solar energy project of a communal scale in Azerbaijan. Today's agreement sets a precedent for further participation of the private sector in the renewable energy market of Azerbaijan, actively supported by the EBRD at the political and investment level. After commissioning, the plant with a capacity of 230 MW of renewable energy will generate up to 558-gigawatt hours (GWh) of electricity, which will reduce annual CO2 emissions by 265,000 tonnes.

This will not only support Azerbaijan's decarbonisation programme but also contribute to Europe's energy security by increasing the availability of domestic gas for export. Thus, the project will contribute to the achievement of the priorities set out in the United Nations Sustainable Development Goals for the period up to 2030 (SDGs), namely: clean and affordable energy; industry, innovation and infrastructure; and actions to combat climate change.

The EBRD is an important institutional investor in Azerbaijan. To date, the bank has invested more than 3.6 billion euros [$3.67 billion] in 181 projects. The bank's strategy in the country is aimed at helping Azerbaijan diversify its economy and develop the non-oil private sector.