BAKU, Azerbaijan, February 27. The European Bank for Reconstruction and Development (EBRD) has revealed details of the upcoming provision of a sovereign loan to the government of Azerbaijan, amounting to up to $30 million for AzerEnergy OJSC, Trend reports via the EBRD.
This credit agreement is expected to be approved on May 1, 2024, and it will contribute to the implementation of Azerbaijan's plans for the development of renewable energy sources.
The funds are intended to finance the purchase of auto-transformer equipment for construction works at four operational substations in Azerbaijan, where energy from the renewable energy sources will be "funneled".
The borrower will be the Ministry of Finance of Azerbaijan, and the project will be implemented by AzerEnergy OJSC.
The project is related to supporting the development of a 'low-carbon pathway' for Azerbaijan's energy sector.
"The project will help enhance the flexibility of Azerbaijan's energy system necessary for integrating renewable energy capacities. The successful implementation of the project will serve as an example for further projects to strengthen networks that are crucial for integrating renewable energy projects in the country," noted the EBRD.
EBRD experts said that the project will contribute to improving the quality of a sustainable energy transition, allowing for the connection of planned renewable energy plants, which is currently not possible.
The financing structure is long-term financing.
"This project will be the first EBRD project aimed at modernizing the energy system necessary to increase the flexibility of the energy system and integrate renewable energy capacities in Azerbaijan. Thus, the successful implementation of the project will serve as an example and a replicable standard for further projects to strengthen networks that are crucial for integrating future RES projects," emphasized the EBRD.
The project is expected to bring certain environmental benefits through the modernization of substation capacities to support the transition to the integration of renewable energy sources.
Notably, the EBRD has been cooperating with Azerbaijan since 1992 and is the country's leading investor.
