BAKU, Azerbaijan, September 3. The Asian Development Bank (ADB) is considering providing $500,000 in grant financing to support the preparation of sustainable power infrastructure projects in Azerbaijan.
The technical assistance is proposed to be financed through the Technical Assistance Special Fund (TASF) and will support the preparation of the first phase of the proposed Azerbaijan Power Distribution Modernization Project, which is included in ADB’s 2026 indicative country pipeline and monitoring report.
The assistance will also finance selected sector studies, capacity-building and gender-related activities aimed at addressing priority needs in the power sector, strengthening project readiness and supporting future ADB operations.
The project is expected to improve the readiness of investments in power distribution grid digitalization and renewable energy integration.
The broader impact of the assistance is expected to be improved electricity supply through the distribution network.
Feasibility study for the power distribution modernization and digitalization project, including assessment of the suitability of digital substation technology has been completed. Moreover, institutional capacity of OJSC Azerishiq for ADB project readiness and gender responsiveness has been strengthened.
According to the latest data from the Asian Development Bank (ADB), Azerbaijan secured $2.53 billion in sovereign financing for 10 projects between 2015 and 2024. More than half of that funding (51%) was allocated to regional cooperation and integration projects, representing one of the highest shares among ADB's peer countries. Another 39% supported private sector development, while 18% was dedicated to climate finance and 10% to digital transformation initiatives.
Over the same period, ADB approved nine non-sovereign operations totaling $963.9 million, all of which were directed toward private sector development. Notably, 78% of these commitments were linked to regional cooperation and integration—the highest proportion among comparable upper middle-income economies in ADB's portfolio.
Data from the Central Bank of Azerbaijan show that ADB's foreign direct investment in the country's economy reached $2.075 million in the first quarter of this year, up $455,000, or 28.1%, from the same period a year earlier.
ADB has also expanded its support for Azerbaijan's energy transition. In April 2025, the bank signed a memorandum of understanding with the Asian Infrastructure Investment Bank (AIIB) and the energy ministries of Azerbaijan, Kazakhstan, and Uzbekistan to support the preparation of a feasibility study for the Caspian Green Energy Corridor, a regional initiative aimed at enabling cross-border trade in renewable electricity.
The bank is also providing technical assistance for renewable energy projects in Azerbaijan. Among its recent initiatives is a pilot floating solar power plant on Boyukshor Lake, launched in 2024 to evaluate the commercial viability of floating photovoltaic technology and lay the groundwork for future large-scale deployment.
These efforts are aligned with ADB's 2025–2029 Country Partnership Strategy for Azerbaijan, which identifies green, resilient and diversified economic growth as a central pillar of cooperation, with a strong focus on clean energy, climate resilience and sustainable infrastructure.
