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Nigar Hasanova

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In the Caucasus, the EBRD is a significant institutional investor. More than €3.6 billion has been invested by the Bank in 188 projects in Azerbaijan so far. It should be mentioned that the Country Strategy for 2019–2024 governs the cooperation between the EBRD and Azerbaijan. Its primary objective is to assist the nation in diversifying its economy and advancing its green climate objectives. The Bank places a high priority on combating climate change, but EIB Global also works in other priority areas, such as innovation, digital and human capital, small and medium-sized businesses, sustainable cities and regions, sustainable energy and natural resources, and small and medium-sized businesses. In this context, the Bank was consulted regarding actions to be taken to carry out priority projects in the green economy, energy, particularly renewable and alternative energy, infrastructure, private sector development, and other areas.

The first project for building a massive solar power plant in Garadagh was co-financed by EBRD to assist Azerbaijan's decarbonization initiative. With assistance from the OPEC Foundation, the European Bank for Reconstruction and Development (EBRD) is funding the building of Khizi-Absheron, a 240-megawatt wind power project, in eastern Azerbaijan. This is the biggest utility-scale wind energy plant in the Caucasus and the nation's first wind energy project overall. It is anticipated that the wind power plant will generate up to 893 gigawatt-hours of net electricity annually once it is operational. Emissions of carbon dioxide may rise as a result by up to 400,000 tons annually.

The OPEC Foundation is proud to be a major partner in the Khizi-Absheron wind power project, which is a significant advancement in Azerbaijan's energy landscape and involves foreign partners as well as a public-private partnership project on renewable energy sources for the private sector, according to Director General Abdulhamid Alkhalifa.

"Thanks to our support, we are trying to promote ecologically clean energy production and Azerbaijan's diversified energy future. The agreement is also proof of what international cooperation can achieve for the purpose of development," he stressed.

The EBRD has already assisted Azerbaijan with a preliminary evaluation of the nation's low-carbon hydrogen potential to diversify the country's energy sources. In August 2023, a preliminary report written by a foreign consultant was released. The paper states that Azerbaijan, like the European Union, is in high demand for renewable hydrogen and is more than capable of producing it to promote decarbonization locally.

“The nation can provide the areas with renewable fuel at a cost that is competitive,” EBRD stated.

The ACWA Power Azerbaijan Renewable Energy project firm, owned by ACWA Power, an international developer, investor, partner, and operator of a portfolio of power and freshwater production facilities, received a loan of $197.1 million (€186.9 million) from the bank. The OPEC International Development Fund (OPEC Fund) will contribute to the project's financing.

"We are proud to finance this remarkable project in Azerbaijan. In the past, by signing a Memorandum of Understanding with Azerbaijan and our long-time partner ACWA Power, we committed ourselves to the implementation of projects in the field of renewable energy sources, green hydrogen, and desalination of salt water in our regions. I am glad that thanks to this memorandum, we have realized approximately 1.5 gigawatts of the promised volume of increasing renewable energy in the regions. We are grateful to the ACWA Power company and the OPEC fund for their common support in the fight against climate change," said Nandita Parshad, managing director of the Sustainable Infrastructure Group of EBRD.

In response, ACWA Power CEO Marco Arcelli stated that his organization is keen to assist Azerbaijan in realizing its objective of obtaining thirty percent of its energy demands from renewable sources.

"We are deeply grateful to our financial partners, the EBRD and the OPEC Foundation, for their continued support in making this goal a reality. Our commitment to sustainable development goes beyond borders, and we count on the continued support of all stakeholders as we mark another milestone in this important project," he also added.

Through investment, technical collaboration, and policy dialogue based on the memorandum of understanding agreed upon between the EBRD and Azerbaijan in December 2022, the Bank plays a significant role in supporting the nation's ambitious green agenda and implementing Azerbaijan's goal of 40% reduction in emissions by 2050.

Regarding future plans, a virtual meeting was conducted between Minister of Economy Mikayil Jabbarov, the head of the European Bank for Reconstruction and Development (EBRD), and Jurgen Rigterink, the first vice president of the bank, to discuss potential future collaboration and opportunities.

Jurgen Rigterink emphasized that Azerbaijan's globally significant activities foster partnership and that the scope of bilateral cooperation encompasses significant concerns. The bank's first vice president mentioned how crucial it is that Azerbaijan hosts the 29th Conference of the Parties to the UN Framework Convention on Climate Change (COP29) and expressed the EBRD's readiness to assist Azerbaijan in this endeavor. During the discussion, details of our nation's socio-economic priorities were shared and emphasis was placed on Azerbaijan's successful relationships with the EBRD in several areas. It was observed that there are numerous chances for collaboration to achieve the predetermined development objectives.

Jurgen Rigterink, the first vice-president of the EBRD, remarked on the Bank's successful collaboration with our nation, conveyed the organization's intention to keep assisting Azerbaijan's economic growth, and stated that Azerbaijan's economic potential provides a solid foundation for future relations.

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