BAKU, Azerbaijan, September 26. Azerenergy OJSC is strengthening network investment in partnership with the World Bank, Vyacheslav Gordienko, investment specialist for Europe and the South Caucasus at the International Finance Corporation (IFC), said at the event "Green Energy Week 2025: Azerbaijan and Central Asia" held in Baku, Trend reports.
He also said that prioritizing grid investment, robust power purchase agreements (PPAs), and implementing offshore pilot projects are key factors in improving the investment climate, and Azerbaijan currently has 1.7 gigawatts of energy potential allocated for projects and ready for use by 2027.
According to him, the priority is to ensure investment in the network.
"The encouraging point in this regard is that Azerenergy OJSC is closely cooperating with the World Bank Group to implement a large-scale investment program.
In addition to the network, the predictability of revenues is also important. In this regard, the presence of PPAs is important. The best option is PPAs with a reliable buyer and a contract term that matches the debt repayment period. This creates favorable conditions for attracting additional investment," he explained.
The IFC representative emphasized that in terms of offshore projects in Azerbaijan, the implementation of a 200-megawatt pilot project is a very positive step.
"This pilot project is important in terms of showing the way to a real project. Otherwise, the fact that this opportunity is too large makes it difficult for one country to cope with it alone and requires regional cooperation," he pointed out.
Gordienko noted that risk management in reliable power purchase agreements (PPPs) and project development is possible through early planning, standardized PPAs, organizing investment in hard currency, local currency loans, and currency hedging.
"The ideal way is to take risks into account at an early stage. While the government side designs a 'bankable PPP' framework, the company side can minimize risks during project preparation and design.
The presence of a standard PPA is more efficient than negotiating a new contract for each project. This reduces legal costs and time loss.
Currency risks are also of great importance for investors and project developers. The most commonly used approach is to organize an 'offtake' contract in hard currency. In this case, the currency risk is transferred from the developer to the buyer. If this is not possible, another way is to take out a loan in local currency.
It's also possible to use hedging instruments such as swaps and futures to protect future income related to currency risk. Although this creates additional costs, it provides greater confidence in future income," he added.
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