Baku, Azerbaijan, Oct. 26
By Taleh Mursagulov – Trend:
ADB supports the Government’s efforts to reform the energy sector and ensure a reliable supply of power to households and businesses, the Vice President of the Asian Development Bank (ADB) Wencai Zhang said in an interview with Trend and Azernews.
The vice president welcomed the introduction of two layers of differentiated electricity tariffs in December 2016 and the establishment of the Energy Sector Regulator in December 2017.
Zhang stressed that the government now plans to undertake further reforms, which ADB also support. In particular, he continued, the government plans to establish a regulatory framework for sustainable tariff mechanisms, to adopt an electricity market law and to create the Renewables and Alternative Energy Framework, including legislation on Efficient Use of Energy Resources and Energy Efficiency and to take other measures.
"The first tranche of ADB’s multitranche financing facility (MFF) for Power Distribution Enhancement Program has helped reduce the losses of electricity and generate additional revenues via enhanced collection. Apart from rehabilitation of critical elements of power distribution infrastructure, the first tranche also supported the preparation of the electricity sector’s financial recovery plan. The approval of this plan, which recommends a new electricity tariffs structure, will encourage private sector investment. The second tranche, if implemented, can further promote the technical and financial viability of the Power Distribution Company (Azerishiq)," Zhang said.
Also, the vice president noted that the ADB will continue to support the government’s plan to develop renewable energy, including through the pilot design-build-operate project on floating solar panels on Boyukshor Lake.
In addition, the ADB vice president said the bank is currently discussing with the government on how ADB can continue to support the power distribution sector.
In May 2015, Azerbaijan and the ADB signed a memorandum of understanding on the investment program in the amount of $1 billion, providing for the reconstruction and modernization of the country's energy system.
In accordance with the draft investment program, the ADB will allocate $ 750 million in three tranches ($ 250 million each), the remaining $ 250 million will be provided by the Government of Azerbaijan. These funds will be disbursed over five years.
The allocated funds are planned to be spent on upgrading the electric distribution network, substations, improving services provided to customers, replacing the existing meters with digital ones, and enhancing the workforce capacity of Azerishiq OJSC.
Azerbaijan became a member of the ADB in 1999.