BAKU, Azerbaijan, September 11. The International Finance Corporation (IFC) is prepared to support the Azerbaijani government in developing public-private partnership (PPP) projects in water and other infrastructure sectors, IFC Senior Investment Officer Nico Saporiti told Trend.
Saporiti initiated the discourse with a succinct encapsulation of the organizational framework he embodies.
“IFC is part of the World Bank Group. While the World Bank typically finances projects in the public sector, IFC advises and finances projects led by the private sector. At present, we are serving as advisors to Azerbaijan’s Ministry of Economy in negotiations with ACWA Power, which is a very critical project,” he said.
Saporiti noted that IFC is currently assisting the ministry with structuring the contract for a desalination project and supporting the negotiation process.
“The pilot desalination project is nearing completion. It is now in the discussion and evaluation stage with ACWA Power.
That is why I am here. I hope to meet the ministry again tomorrow to discuss what other projects we might work on together in the future. I am aware that the government plans to make significant investments, using public, private, and PPP resources, in wastewater treatment and potentially in water reuse,” he explained.
Saporiti described the phased process Azerbaijan has followed in the seawater desalination project.
“In the past, some feasibility studies on desalination were carried out. Later, the government hired technical consultants to structure the project, for example, determining the size of the plant, its location, and the commercial terms under which the government would pay for water. What would happen in the event of inflation? What if demand were lower or higher? These questions all concern contract structure. Afterward, lawyers were brought in to prepare agreements that would govern the relationship between ACWA Power and the government.
An open tender was then held, inviting many international companies to submit proposals. The government spent two or three months comparing and evaluating the offers and determined that the best proposal came from ACWA Power, which is now the lead sponsor.
Since March, the government and ACWA Power have been reviewing this important agreement line by line. The contract will regulate relations between the government and this private company for the construction and operation of the plant over the next 25-30 years,” he added.
Saporiti emphasized that negotiations on the project are ongoing.
“As far as I know, only minor details remain before the agreement is signed. This could happen next week or the week after. In other words, in the coming days a contract on the seawater desalination project will be signed between Azerbaijan’s authorized body and ACWA Power.
After that, ACWA Power will take the contract and seek financing for the project. Most likely, they will approach some Algerian banks and perhaps international financial institutions like ours. They will aim to secure the most favorable terms to ensure water is delivered at the lowest possible cost. I estimate this financing process will take about six months,” he noted.
The IFC official added that the institution also hopes to support Azerbaijan not only in water management but also in other infrastructure sectors such as transport, telecommunications, and any areas where the government requires PPP projects.
“Like other development finance institutions, IFC has made climate change a top priority in its strategy. My colleagues on the investment side provide financing and loans, and they are always pleased to look into renewable energy projects such as solar, wind, hydropower, or battery storage. I am confident they would welcome the opportunity to finance more projects of this kind in Azerbaijan," the official stated.
Saporiti went on to highlight the framework of the World Bank’s work.
“The World Bank is governed by member governments, and Azerbaijan holds a stake in the World Bank Group. Every few years, we sit down with governments to jointly define a cooperation strategy.
For Azerbaijan, this strategy includes support for the renewable energy transition, improving access to infrastructure such as logistics and transport, and creating jobs. Job creation is now a central focus of the World Bank,” he concluded.
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