World Bank to back Azerbaijan in expanding renewable energy use

The World Bank (WB) has approved the Azerbaijan Scaling-Up Renewable Energy Project (AZURE), an initiative that will strengthen Azerbaijan’s power transmission network, enable the country to diversify its energy mix, and meet growing electricity demand through a more resilient and reliable power grid.

The WB said the $173.5 million loan from the International Bank for Reconstruction and Development (IBRD) will support Azerbaijan’s efforts to expand and modernize its energy infrastructure, thus establishing the enabling conditions for the private sector to invest in Azerbaijan’s large untapped renewable energy potential, particularly in onshore wind energy, Caliber.Az reports via local media.

The project will help unlock an initial $384 million in private investments, paving the way for further renewable energy investments, as Azerbaijan considers expanding its energy exports.

"This project will enable the delivery of reliable, affordable, and sustainable electricity that people and businesses in Azerbaijan can depend on," said Stefanie Stallmeister, World Bank Country Manager for Azerbaijan. "By supporting the strengthening of the power grid, we are helping Azerbaijan achieve its long-term vision for energy security, creating the foundation for sustained growth and opportunity."

The AZURE project focuses on expanding and reinforcing key transmission lines and substations to:

Connect the 240-Megawatt Absheron-Garadagh Wind Power Plant to the transmission grid,
Strengthen and expand the 330/500 kV high-voltage grid to ensure safe and reliable evacuation of up to 1 Gigawatt of privately developed renewable power generation, and Improve grid stability to better integrate 1.8 Gigawatts of renewable electricity through private investments.

Stephanie Gil, World Bank Practice Manager for Energy in Europe and Central Asia, added: "Through the project’s inclusion in the Europe and Central Asia Renewable Energy Scale-up (ECARES) multi-year program launched by the World Bank Group last year, AZURE is benefiting from a larger platform that convenes governments, financial institutions, and private sector stakeholders, and facilitates the exchange of best practices, regulatory solutions, and investment strategies. Through this approach, the best global and regional expertise can help drive development and support scalable and replicable private sector led-energy solutions."

Investments will concentrate on connecting areas with high renewable energy potential to demand centers. By enhancing transmission capacity and increasing reliability, the project will create a more robust and flexible power system capable of meeting future energy needs of households and businesses alike. This, in turn, will help attract private investment, support economic growth, and create jobs.

The project is a first step towards supporting Azerbaijan’s vision of creating a green energy corridor, an initiative to increase renewable energy development and trade in the region.

By Khagan Isayev