BAKU, Azerbaijan, October 29. Azerbaijan is expanding green financing opportunities for renewable energy, said Rza Naghiyev, Director of the Finance Department at SOCAR Green LLC, during the 13th Caspian Energy Forum in Baku, Trend reports.
According to him, project financing needs to be adopted on a larger scale, and this trend is already visible. However, it should progress more rapidly, with greater participation from local institutions.
“In 2022, the Central Bank established a legislative framework and adopted several decisions regarding project financing. Additionally, a document on green taxonomy was approved — a very promising step. Nevertheless, this is not sufficient, as third-party evaluators must be involved to prevent any greenwashing attempts,” he noted.
Naghiyev also emphasized that regulators and the Central Bank should take these aspects into account when financing such projects and adopt more favorable policies to encourage banks’ appetite for long-term financing — a game changer for renewable energy initiatives.
Regarding tax exemptions for renewable energy projects, it was mentioned that by the end of 2024, a support mechanism was adopted providing tax breaks for up to 30 years, which represents a highly significant step. However, additional tax relief measures can also be applied to B2B projects. Furthermore, different tax exemptions can be extended to the financing of green projects in various forms, including exemptions from withholding taxes, permitted interest deductions, and exemptions for derivative and hedging products, which are commonly used in long-term renewable energy financing.